New Issue: Lehman sells $166,000 19.5% reverse exchangeables linked to AIG

By Laura Lutz

Des Moines, Dec. 11 - Lehman Brothers Holdings Inc. priced a $166,000 issue of 19.5% reverse exchangeable notes due June 12, 2008 linked to the common stock of American International Group, Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

If AIG stock falls below the knock-in price of $49.16 - 80% of the initial value - during the life of the notes and finishes below its initial price of $61.45, the payout at maturity will be a number of AIG shares equal to par divided by the initial share price.

Otherwise, the payout will be par.

Lehman Brothers Inc. is the underwriter.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Reverse exchangeable notes
Underlying stock:	American International Group, Inc. (Symbol: AIG)
Amount:	$166,000
Maturity:	June 12, 2008
Coupon:	19.5%, payable monthly
Price:	Par
Payout at maturity:	If AIG stock falls below the knock-in price of $49.16 during the life of the notes and finishes below its initial value, a number of shares equal to par divided by the initial share price; otherwise, par
Initial price:	$61.45
Knock-in price:	$49.16, 80% of $61.45
Pricing date:	Dec. 7
Settlement date:	Dec. 12
Underwriter:	Lehman Brothers Inc.
Fees:	1.5%

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