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Lehman Brothers plans issue of Rapids linked to basket of five indexes
By Angela McDaniels
Seattle, Feb. 16 - Lehman Brothers Holdings Inc. plans to price an issue of 0% senior unsecured notes due May 2007 in the Return-Accelerated Portfolio Debt Securities (Rapids) structure, according to a 424B5 filing with the Securities and Exchange Commission.
The return will be linked to a basket of five stock indexes: the Korea Stock Price Index 200, with a 31.3% weight; the MSCI Taiwan Index, with a 24.7% weight; the Amex Hong Kong 30 Index, with a 18.9% weight; the FTSE/Xinhua China 23 Index, with a 14.5% weight, and the MSCI Singapore Free Index, with a 10.6% weight.
At maturity, the notes will pay par plus double any gain on the basket. The return will be capped at between $1,170 and $1,190 per note, with the exact cap to be determined at pricing.
If the basket loses up to 10%, payout at maturity will be par. If the basket loses more than 10%, payout at maturity will be par less 1.1111 times any loss over 10%.
Lehman Brothers Inc. will be underwriter for the offering.
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