New Issue: Lehman prices $2.96 million 12.5% reverse exchangeables linked to Citigroup

By Susanna Moon

Chicago, Sept. 11 - Lehman Brothers Holdings Inc. priced a $2.96 million issue of reverse exchangeable notes due March 12, 2008 linked to the common stock of Citigroup Inc., according to a 424B2 filing with the Securities and Exchange Commission.

The six-month notes will pay 6.25% for an annualized rate of 12.5%. Interest is payable monthly.

The payout at maturity will be par unless the stock falls by more than 20% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Citigroup shares equal to $1,000 divided by the initial share price or, at the bank's option, the equivalent cash value.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	Citigroup Inc. (NYSE: C)
Amount:	$2,957,000
Maturity:	March 12, 2008
Coupon:	12.5%, payable monthly
Price:	Par
Payout at maturity:	If the stock falls below the barrier price during the life of the notes and finishes below the initial share price, a number of shares equal to $1,000 divided by the initial price or the equivalent cash value; otherwise, par
Initial share price:	$45.48
Trigger price:	$36.384, or 80% of initial share price
Pricing date:	Sept. 7
Settlement date:	Sept. 12
Underwriter:	Lehman Brothers Inc.
Fees:	2.2%

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