New Issue: Lehman prices $10 million notes linked to Morgan Stanley at 0.75%, up 16.11%

New York, June 16 - Lehman Brothers Holdings Inc. priced $10 million of 0.75% five-year notes performance linked to Morgan Stanley common stock with a 16.11% initial exchange premium, according to a 424B5 filing with the Securities and Exchange Commission.

The notes have a cash or stock payout at maturity linked to Morgan Stanley and can be converted at any time for stock at the holder's option.

Issuer:	Lehman Brothers Holdings Inc.
Issue:	Performance-linked medium-term senior notes
Underlying stock:	Morgan Stanley
Amount:	$10 million
Greenshoe:	$1.5 million
Maturity:	June 21, 2010
Coupon:	0.75%
Price:	Par
Yield:	0.75%
Exchange premium:	16.11%
Exchange price:	$59.2045
Payout at maturity:	Greater of par in cash or percentage appreciation above exchange price (16.11% above $50.99 price Lehman paid to hedge notes), in cash or stock at Lehman's option
Call:	June 14, 2008 onwards with same payout calculation as at maturity
Pricing date:	June 14
Settlement date:	June 21
Underwriter:	Lehman Brothers
Distribution:	Off shelf

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