Lehman Brothers to Offer 3.0 Million Shares of Convertible Preferred Stock

    NEW YORK, March 31 /PRNewswire-FirstCall/ -- Lehman Brothers Holdings
 Inc. (NYSE:   LEH) today announced that, in response to investor interest, it
 intends to offer 3,000,000 shares of Non-Cumulative Perpetual Convertible
 Preferred Stock. Lehman Brothers also expects to grant the underwriter for
 the offering an option to purchase up to 450,000 additional shares of the
 Preferred Stock to the extent the underwriter sells more than 3,000,000
 shares of the Preferred Stock in the offering. The proceeds from this
 offering will be used to bolster the Firm's capital and increase financial
 flexibility.
 
     "Given the challenging environment and our previously stated view that
 it will likely continue the balance of the year, issuing convertible
 preferred is appropriate as it optimizes our funding and accelerates our
 plan to reduce leverage, and at the same time minimizes dilution to our
 shareholders," said Erin Callan, managing director and chief financial
 officer of Lehman Brothers and a member of the Firm's executive committee.
 "We also felt this was the right time as there was a window of opportunity
 in the market, as we have received significant interest from several key
 institutional investors, who have been strong supporters of the Firm over
 time."
 
     The Non-Cumulative Perpetual Convertible Preferred Stock, Series P,
 carries a par value of $1.00 per share and a liquidation preference of
 $1,000 per share (the "Preferred Stock").
 
     Upon conversion, the Preferred Stock will be convertible into shares of
 Lehman Brothers' common stock, plus cash in lieu of fractional shares. The
 non-cumulative dividend rate, conversion rate and other terms are yet to be
 determined. An application will be made to list the Preferred Stock on the
 New York Stock Exchange. The offering of the Preferred Stock is being
 conducted as a public offering registered under the Securities Act of 1933.
 
     Lehman Brothers Inc. is serving as sole book-running manager of this
 offering. The offering will be made under Lehman Brothers Holdings'
 existing shelf registration statement filed with the Securities and
 Exchange Commission.
 
     Lehman Brothers (ticker symbol: LEH), an innovator in global finance,
 serves the financial needs of corporations, governments and municipalities,
 institutional clients, and high net worth individuals worldwide. Founded in
 1850, Lehman Brothers maintains leadership positions in investment banking,
 equity and fixed income sales, trading and research, private investment
 management, asset management and private equity. The Firm is headquartered
 in New York, with regional headquarters in London and Tokyo, and operates
 in a network of offices around the world. For further information about
 Lehman Brothers' services, products and recruitment opportunities, visit
 the Firm's Web site at www.lehman.com.
 
     Cautionary Note Regarding Forward-Looking Statements
 
     This press release contains forward-looking statements. These
 statements are not historical facts, but instead represent only the Firm's
 expectations, estimates and projections regarding future events. These
 statements are not guarantees of future performance and involve certain
 risks and uncertainties that are difficult to predict, which may include
 risks and uncertainties relating to market fluctuations and volatility,
 industry competition and changes in the competitive environment, investor
 sentiment, liquidity and credit ratings, credit exposures, operational
 risks and legal and regulatory matters. The Firm's actual results and
 financial condition may differ, perhaps materially, from the anticipated
 results and financial condition in any such forward-looking statements and,
 accordingly, readers are cautioned not to place undue reliance on such
 statements. The Firm undertakes no obligation to update any forward-looking
 statements, whether as a result of new information, future events or
 otherwise. For more information concerning the risks and other factors that
 could affect the Firm's future results and financial condition, see "Risk
 Factors" in the prospectus supplement and accompanying prospectus relating
 to the offering and in the documents incorporated by reference therein.
 
     The issuer has filed a registration statement (including a prospectus)
 with the U.S. Securities and Exchange Commission for this offering. Before
 you invest, you should read the prospectus for this offering in that
 registration statement, and other documents the issuer has filed with the
 SEC for more complete information about the issuer and this offering. You
 may get these documents for free by searching the SEC online database
 (EDGAR(R)) at www.sec.gov. Alternatively, you may obtain a copy of the
 prospectus from Lehman Brothers Inc. by calling 1-888-603-5847.
 
 
 

SOURCE Lehman Brothers Holdings Inc.

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