Term sheet no. 1 to
Prospectus supplement dated May 30, 2006
Prospectus dated May 30, 2006
Registration Statement no. 333-134553
Dated October 23, 2007
Rule 433
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Synthetic Convertible Notes
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Indicative Terms and Conditions as of October 23, 2007
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Synthetic Convertible Securities | Lehman Brothers Holdings Inc. has filed a registration statement (including a prospectus) with the U.S. Securities and | |||||
Contact Information:
Bill Gavaris Lehman Brothers Inc. 745 7th Avenue New York, NY 10019
TEL 212-526-5614 gavaris@lehman.com |
General Issue Terms | |||||
Issuer: |
Lehman Brothers Holdings Inc. (A+/A1/AA-)* | |||||
Issue Type: |
Registered medium term notes (equity-linked) | |||||
Securities Offered: |
Synthetic Convertible Notes (the “Notes”) with payment at maturity linked to the performance of the Reference Equity | |||||
Currency: |
USD | |||||
Maturity: |
October 30, 2012 (5 years after the Settlement Date) | |||||
Principal Amount: |
$1,000 per Note, and in the aggregate,$3,650,000 | |||||
Purchased Amount: |
$1,120 per Note, and in the aggregate, $4,088,000; i.e. note buyer is purchasing 3,650 Notes at a premium of 112.00% | |||||
Denominations: |
$1,000 and integral multiples thereof | |||||
Issue Price: |
112% ($1,120 per Note) | |||||
Interest | ||||||
Interest Rate:
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2.40%, calculated on a 30/360 day basis
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Interest Payment Dates:
| Semi-annually, on the30th calendar day of eachApril andOctober, beginning onApril 30, 2008.
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Interest Record Date: | 15 calendar days prior to each Interest Payment Date | |||||
Calculation of Payment at Maturity | ||||||
Reference Equity:
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The common stock ofIcahn Enterprises LP (“IEP”)
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Conversion Premium: | 23.56%
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Threshold Value: | $159.8001 (123.56% of the Initial Execution Price)
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Initial Execution Price: | $129.33 per share of the Reference Equity | |||||
Conversion Ratio: |
6.2578 ($1,000 divided by the Threshold Value) | |||||
Payment at Maturity: |
For each Note, the greater of the following amounts, which may be paid in cash or settled in shares of the Reference Equity:
(i) $1,000, plus accrued but unpaid interest; and
(ii) The Alternative Redemption Amount, plus accrued but unpaid interest | |||||
* Lehman Brothers Holdings Inc. is rated A+ by Standard & Poor’s, A1 by Moody’s and AA- by Fitch. A credit
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Alternative Redemption Amount: | The Alternative Redemption Amount per $1,000 Note will equal $1,000, multiplied by a ratio determined by dividing (a) the Settlement Value on the Valuation Date by (b) the Threshold Value. | |||||
Synthetic Convertible Securities
Contact Information:
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Redemption Details | |||||
Redemption Option: |
On or after the Earliest Redemption Date, Issuer may redeem, on not less than 30 days’ (or such other period specified in the relevant pricing supplement) prior written notice, each $1,000 Note at a price equal to the amount that would be payable to the Buyer at maturity, but with the Settlement Value based on the closing price of the Reference Equity, on the date notice of redemption is given, plus any accrued but unpaid interest. | |||||
Bill Gavaris Lehman Brothers Inc. 745 7th Avenue New York, NY 10019
TEL 212-526-5614 gavaris@lehman.com |
Earliest Redemption Date: |
3 years after Trade Date | ||||
Repurchase Rights | ||||||
Repurchase Option: |
On any business day during the Repurchase Period, the Buyer has the right to irrevocably tender each $1,000 Note in exchange for a number of shares of the Reference Equity equal to the Conversion Ratio (plus cash in lieu of fractional shares, calculated using the Settlement Value on the Valuation Date, which will be the third Business Day prior to the Repurchase Date). To exercise the Repurchase Option, the Buyer must complete a “Notice of Exchange” and deliver it to the Issuer. If the Buyer exercises its Repurchase Option, the Issuer will deliver to the Buyer shares of the Reference Equity equal to the Conversion Ratio (which may have a market value greater or less than $1,000 per $1,000 Note), plus cash in lieu of fractional shares, plus any accrued but unpaid interest, on the Repurchase Date.
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Repurchase Period: | Trade Date to and including the eighth business day prior to the Stated Maturity Date
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Repurchase Notice Period: | 8 business days | |||||
Repurchase Date: |
The eighth business day following the business day when the “Notice of Exchange” is delivered to the Issuer.
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Settlement Details | ||||||
Settlement Type: |
Cash or physical on the Stated Maturity Date at the option of the Issuer
Mandatory physical on any Repurchase Date,
Cash if the Issuer exercises the Redemption Option | |||||
Settlement Value: |
Closing level of the Reference Equity on the Valuation Date multiplied by the Multiplier
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Base Dividend: |
$0.15, which is the most recentquarterly dividend paid by the Reference Equity
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Synthetic Convertible Securities
| Multiplier: | The initial Multiplier is 1.00. The Multiplier is subject to adjustment under various circumstances, including if the Reference Equity pays a dividend different from the Base Dividend. Please refer to the prospectus supplement for further details. | ||||
Dates | ||||||
Trade Date: |
October 23, 2007
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Contact Information: | Settlement Date/Issue Date: | October 30, 2007 (5 business days after the Trade Date)
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Stated Maturity Date: | October 30, 2012 (5 years after the Settlement Date) | |||||
Bill Gavaris Lehman Brothers Inc. 745 7th Avenue New York, NY 10019
TEL 212-526-5614 gavaris@lehman.com |
Valuation Date: |
The third business day prior to the Stated Maturity Date or, in the case of the exercise of the Issuer’s Redemption Option, the date that notice of redemption is given or, in the case of the exercise of the Buyer’s Repurchase Option, the date that is a number of business days equal to the Determination Period specified in the relevant pricing supplement before the Repurchase Date, in each case subject to postponement if a market disruption event occurs. | ||||
Determination Period: |
Three business days
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Other Information | ||||||
Listing: |
The Notes will not be listed | |||||
Quotation Exchange: | For the Notes: None
For the Reference Equity:New York Stock Exchange | |||||
TRACE Eligibility: |
Yes | |||||
Business Days: |
New York | |||||
Calculation Agent: |
Lehman Brothers Inc.
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Trustee: | Citibank N.A.
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Adjustments: | Detailed provisions specifying the adjustments to be made to the terms and conditions of the Notes upon the occurrence of a market disruption event or an adjustment event in relation to the Reference Equity shall be contained in the prospectus supplement (including any applicable pricing supplement) relating to the Notes. All purchases of Notes are deemed to be subject to the terms thereof. | |||||
CUSIP Number: |
5249083L2
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ISIN Number: | US5249083L27
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Clearing: | DTC
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ADP Description: | LBH “IEP” Syn Convert Synthetic Convertible onIEP 123.56%-Conv Price Dec12-MAT | |||||