Lehman to issue 15.8% reverse exchangeables linked to Freeport-McMoRan

By E. Janene Geiss

Philadelphia, July 12 - Lehman Brothers Holdings Inc. plans to price an issue of reverse exchangeable notes due Jan. 31, 2008 linked to the common stock of Freeport-McMoRan Copper & Gold Inc., according to an FWP filing with the Securities and Exchange Commission.

The six-month notes will pay 7.9% for an annual rate of 15.8%.

The payout at maturity will be par unless Freeport-McMoRan stock falls below the knock-in level - 80% of the initial share price - during the life of the securities and finishes below the initial share price, in which case the payout will be a number of Freeport-McMoRan shares equal to $1,000 divided by the initial share price.

The notes are expected to price July 26 and settle July 31.

Lehman Brothers Inc. is the agent.

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