Lehman to issue 21.5% reverse exchangeables linked to Research in Motion

By E. Janene Geiss

Philadelphia, Dec. 6 - Lehman Brothers Holdings Inc. plans to price an issue of reverse exchangeable notes due March 31, 2008 linked to the common stock of Research in Motion Ltd., according to an FWP filing with the Securities and Exchange Commission.

The three-month notes will pay 5.375% for an annualized rate of 21.5%. Interest will be payable monthly.

The payout at maturity will be par unless Research in Motion stock falls below the knock-in level - 60% 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 Research in Motion shares equal to $1,000 divided by the initial share price.

The notes are expected to price on Dec. 21 and settle on Dec. 31.

Lehman Brothers Inc. is the agent.

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