New Issue: Lehman prices $872,000 10.05% reverse exchangeables linked to Virgin Media

By Susanna Moon

Chicago, Oct. 30 - Lehman Brothers Holdings Inc. priced an $872,000 issue of 10.05% reverse exchangeable notes due Jan. 31, 2008 linked to the common stock of Virgin Media Inc., according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable monthly.

The payout at maturity will be par unless the stock falls by more than 30% during the life of the notes and finishes below the initial share price, in which case the payout will be a number of Virgin Media shares equal to $1,000 divided by the initial share price or, at the bank's option, the equivalent cash value.

Lehman Brothers Inc. is the underwriter.

Issuer: Lehman Brothers Holdings Inc.

Issue: Reverse exchangeable notes

Underlying stock: Virgin Media Inc. (Nasdaq: VMED)

Amount: $872,000

Maturity: Jan. 31, 2008

Coupon: 10.05%, payable monthly

Price: Par

Payout at maturity: If the stock falls below the trigger price during the life of the notes and finishes below the initial share price, a number of shares equal to $1,000 divided by the initial share price or the equivalent cash value; otherwise, par

Initial share price: $22.13

Trigger price: $15.491, or 70% of initial share price

Pricing date: Oct. 26

Settlement date: Oct. 31

Underwriter: Lehman Brothers Inc.

Fees: 1.8%

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