-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/aisgV1L+YpijRobxHxgILoiz28Z3PRiZzxARvFVJWm/qvkdWWxQQe775XKjgNl cPRuy53O4kHfSVKu1uGBSg== 0000806085-02-000144.txt : 20020801 0000806085-02-000144.hdr.sgml : 20020801 20020801161114 ACCESSION NUMBER: 0000806085-02-000144 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20020801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-60474 FILM NUMBER: 02717415 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 3 WORLD FINANCIAL CENTER CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 3 WORLD FINANCIAL CENTER CITY: NEW YORK STATE: NY ZIP: 10285 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 424B2 1 mtng017.txt MTNG017 RANGE NOTE PRICING SUPPLEMENT Rule 424(b)(2) Registration No. 333-60474 PRICING SUPPLEMENT NO. 17 dated July 30, 2002 to Prospectus Supplement dated June 14, 2001 and Prospectus dated June 14, 2001 LEHMAN BROTHERS HOLDINGS INC. Medium-Term Notes, Series G Due Nine Months or More From the Date of Issue CUSIP No.: 52517PSR3 ISIN: US52517PSR37 Specified Currency: US Dollars Principal Amount: US$5,000,000.00 Total Per Note Issue Price: US$5,000,000.00 100% Agent's Commission: US$ 0.00 0% Proceeds to Lehman Brothers Holdings: US$5,000,000.00 100% Agent: Lehman Brothers Inc. Agent's Capacity: [ ] As agent [X] As principal (See "Underwriting" below.) Trade Date: July 30, 2002 Original Issue Date: August 29, 2002 Stated Maturity Date: August 29, 2011 Amortizing Note: [ ] Yes [X] No Amortization Schedule: Not applicable Fixed Rate Note Interest Rate per Annum: 8.25%, subject to "Interest Accrual" provisions, as described below. Interest Payment Dates: Each February 28, May 29, August 29, and November 29, commencing on November 29, 2002. Interest Accrual: Interest will accrue on each day on which 6-Month LIBOR for the relevant LIBOR Observation Date is within the applicable LIBOR Range. If the value of 6-Month LIBOR (stated as a percent per annum) on the relevant LIBOR Observation Date is equal to or greater than the applicable LIBOR Range minimum and less than or equal to the applicable LIBOR Range maximum indicated below for LIBOR Observation Dates occurring during the periods indicated, interest will accrue on the Notes for the related day at 8.25% per annum. If, however, the value of 6-Month LIBOR is less than the applicable LIBOR Range minimum or greater than the applicable LIBOR Range maximum on the relevant LIBOR Observation Date, then no interest will accrue on the related day. See "Risk Factors" below for certain relevant considerations. 6-Month LIBOR: For any LIBOR Observation Date, the offered rates for deposits in U.S. dollars for a period of six months, commencing on such LIBOR Observation Date, which appears on Moneyline Telerate on page 3750 (or any successor service or page for the purpose of displaying the London interbank offered rates of major banks) as of 11:00 a.m., London time, on that LIBOR Observation Date. If 6-Month LIBOR cannot be determined on a LIBOR Observation Date as described above, then the calculation agent will determine LIBOR based on quotations from reference banks in the manner described in the Prospectus Supplement for deposits in U.S. dollars for a period of six months, commencing on such LIBOR Observation Date. LIBOR Range: Period LIBOR Range August 29, 2002-Stated Maturity 0.00% to 7.00% LIBOR Observation Date: With respect to each LIBOR Business Day that does not occur during the LIBOR Suspension Period, that LIBOR Business Day. With respect to each day that is not a LIBOR Business Day not occurring during the LIBOR Suspension Period, the last preceding LIBOR Business Day. With respect to each day occurring during the LIBOR Suspension Period, the LIBOR Observation Date will be the last LIBOR Business Day preceding the first day of such LIBOR Suspension Period. LIBOR Suspension Period: The period beginning on the fifth New York Business Day prior to but excluding each Interest Payment Date (including the Stated Maturity Date). LIBOR Business Day: Any day that is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. New York Business Day: Any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed. Interest Computation: Interest will be computed on the basis of the actual number of days in the year and the actual number of days elapsed. "Accrue to Pay": [ ] Yes [X] No Interest Rate Calculation Agent:Citibank, N.A. Optional Redemption: The Notes may be redeemed prior to Stated Maturity at the option of Lehman Brothers Holdings in whole or in part at a price equal to 100% of the principal amount being redeemed, from time to time on each Interest Payment Date, commencing on November 29, 2002. Notice of redemption will be given not less than five New York Business Days prior to the redemption date. Optional Repayment: The holder of the Note may not elect repayment of the Note by Lehman Brothers Holdings prior to Stated Maturity. Extension of Maturity: Lehman Brothers Holdings may not extend the Stated Maturity Date of the Note. Form of Note: [X] Book-entry only (global) [ ] Certificated Depository: The Depository Trust Company Authorized Denominations: $1,000 or any larger whole multiple Issuer Rating: Long-term senior unsecured debt of Lehman Brothers Holdings is currently rated A by Standard & Poor's, A2 by Moody's Investors Service and A+ by Fitch IBCA. Risk Factors An investment in the Notes entails certain risks not associated with an investment in conventional fixed rate medium-term notes. See "Risk Factors" generally in the Prospectus Supplement. The interest rate of the Notes will be fixed, subject to the "Interest Accrual" provisions as described above. Investors should consider the risk that the Interest Accrual provisions applicable to the Notes may result in less interest being payable on the Notes than on a conventional fixed rate debt security issued by Lehman Brothers Holdings at the same time. Investors should also consider the risk that 6-Month LIBOR, determined on a daily basis, may be less than the LIBOR Range minimum or exceed the LIBOR Range maximum on one or more LIBOR Business Days during the applicable period, in which event no interest will accrue for the related days during the period. The secondary market for, and the market value of, the Notes will be affected by a number of factors independent of the creditworthiness of Lehman Brothers Holdings, including the level and direction of interest rates, the Interest Accrual provisions applicable to the Notes, the anticipated level and potential volatility of 6-Month LIBOR, the method of calculating 6-Month LIBOR, the time remaining to the maturity of the Notes, the right of Lehman Brothers Holdings to redeem all or a portion of the Notes from time to time, the aggregate principal amount of the Notes and the availability of comparable instruments. The level of 6-Month LIBOR depends on a number of interrelated factors, including economic, financial and political events, over which Lehman Brothers Holdings has no control. The following table, showing the historical level of 6-Month LIBOR in effect for the hypothetical LIBOR Observation Dates listed below, illustrates the variability of that rate: Historical Levels of 6-Month LIBOR Hypothetical LIBOR Hypothetical LIBOR Observation Date 6-Month LIBOR Observation Date 6-Month LIBOR August 29, 1992 3.625% August 29, 1997 5.844% November 29, 1992 3.938 November 29, 1997 5.906 February 28, 1993 3.312 February 28, 1998 5.695 May 29, 1993 3.500 May 29, 1998 5.750 August 29, 1993 3.438 August 29, 1998 5.594 November 29, 1993 3.500 November 29, 1998 5.149 February 28, 1994 4.000 February 28, 1999 5.127 May 29, 1994 5.000 May 29, 1999 5.245 August 29, 1994 5.312 August 29, 1999 5.895 November 29, 1994 6.562 November 29, 1999 6.049 February 28, 1995 6.438 February 29, 2000 6.331 May 29, 1995 6.062 May 29, 2000 7.052 August 29, 1995 5.875 August 29, 2000 6.820 November 29, 1995 5.688 November 29, 2000 6.680 February 29, 1996 5.250 February 28, 2001 4.908 May 29, 1996 5.594 May 29, 2001 3.990 August 29, 1996 5.781 August 29, 2001 3.495 November 29, 1996 5.531 November 29, 2001 2.098 February 28, 1997 5.688 February 28, 2002 2.030 May 29, 1997 5.969 May 29, 2002 2.098 The historical experience of 6-Month LIBOR should not be taken as an indication of the future performance of 6-Month LIBOR during the term of the Notes. Fluctuations in the level of 6-Month LIBOR make the Notes' effective interest rate difficult to predict and can result in effective interest rates to investors that are lower than anticipated. In addition, historical interest rates are not necessarily indicative of future interest rates. Fluctuations in interest rates and interest rate trends that have occurred in the past are not necessarily indicative of fluctuations that may occur in the future, which may be wider or narrower than those that have occurred historically. Certain United States Federal Tax Consequences Lehman Brothers Holdings believes that the Notes provide for interest at an "objective rate" and therefore constitute "variable rate debt instruments," as those terms are defined in the original issue discount regulations. Lehman Brothers Holdings intends to report interest deductions with respect to the Notes based on this treatment. Under such characterization, holders of the Notes would report interest as ordinary income at the time it is paid or accrued in accordance with their method of accounting for tax purposes. Investors who purchase the Notes at a market discount or premium should consult their tax advisors regarding the appropriate rate of accrual or amortization for such market discount or premium. Investors should consult their tax advisors regarding alternative treatments, including the possible application of the contingent payment debt regulations. Capitalized terms used herein without definition have the meanings ascribed to them in the Prospectus Supplement and Prospectus. Lehman Brothers Holdings Inc. By: /s/ Thomas O'Sullivan Name: Thomas O'Sullivan Title: Authorized Officer -----END PRIVACY-ENHANCED MESSAGE-----