-----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, LGE1XiPGe+JBko/AsEoxfz102Fpt59GxuiH21fqDNJzLclOBrK7chPoEjj9ploUg MRJRpT7Iv24l23/nEWi6fw== 0000806085-03-000086.txt : 20030506 0000806085-03-000086.hdr.sgml : 20030506 20030506165314 ACCESSION NUMBER: 0000806085-03-000086 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20030506 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: 03684661 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 424B2 1 mtng061.txt MTNG061 RANGE NOTE Rule 424(b)(2) Registration No. 333-60474 PRICING SUPPLEMENT NO. 61 dated May 2, 2003 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.: 52517PUF6 ISIN: US52517PUF60 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% In addition, at the Original Issue Date specified below, Lehman Brothers Holdings may issue up to an additional $45,000,000.00 aggregate principal amount of Notes similar in all respects (including with respect to the Issue Price and the Agent's Commission specified above). Agent: Lehman Brothers Inc. Agent's Capacity: [ ] As agent [X ] As principal (See "Underwriting" below.) Trade Date: May 2, 2003 Original Issue Date: May 29, 2003 Stated Maturity Date: May 29, 2015 Amortizing Note: [ ] Yes [X ] No Amortization Schedule: Not applicable [X ] Fixed Rate Note [ ] Floating Rate Note [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate: Constant Maturity [ ] Yes [ ] No [ ] Prime Rate [ ] J.J. Kenny Rate [ ] Eleventh District Cost of Funds Rate [ ] Other: _________________________ Interest Rate per Annum: 7.00%, subject to "Interest Accrual" provisions, as described below. Interest Payment Dates: Each August 29, November 29, February 29, and May 29, commencing on August 29, 2003. 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 7.00% 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 May 29, 2003-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 August 29, 2003. 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 (if the minimum is greater than zero) 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 March 2, 1987 6.438 May 29, 1995 6.062 May 29, 1987 7.562 August 29, 1995 5.875 August 31, 1987 7.531 November 29, 1995 5.688 November 30, 1987 8.000 February 29, 1996 5.250 February 29, 1988 6.875 May 29, 1996 5.594 May 30, 1988 7.938 August 29, 1996 5.781 August 29, 1988 9.062 November 29, 1996 5.531 November 29, 1988 9.500 March 3, 1997 5.719 March 1, 1989 10.438 May 29, 1997 5.969 May 29, 1989 9.688 August 29, 1997 5.844 August 29, 1989 9.000 December 1, 1997 5.938 November 29, 1989 8.312 March 2, 1998 5.688 March 1, 1990 8.312 May 29, 1998 5.750 May 29, 1990 8.500 August 31, 1998 5.594 August 29, 1990 8.250 November 30, 1998 5.148 November 29, 1990 8.375 March 1, 1999 5.122 March 1, 1991 6.938 June 1, 1999 5.251 May 29, 1991 6.188 August 30, 1999 5.895 August 29, 1991 5.875 November 29, 1999 6.049 November 29, 1991 4.938 February 29, 2000 6.331 March 2, 1992 4.367 May 30, 2000 7.062 May 29, 1992 4.188 August 29, 2000 6.820 August 31, 1992 3.625 November 29, 2000 6.680 November 30, 1992 4.000 March 1, 2001 4.951 March 1, 1993 3.312 May 29, 2001 3.990 May 31, 1993 3.500 August 29, 2001 3.495 August 30, 1993 3.438 November 29, 2001 2.098 November 29, 1993 3.500 March 1, 2002 2.040 March 1, 1994 4.000 May 29, 2002 2.098 May 30, 1994 5.000 August 29, 2002 1.815 August 29, 1994 5.312 November 29, 2002 1.469 November 29, 1994 6.562 March 3, 2003 1.339 March 1, 1995 6.438 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 INCOME TAX CONSEQUENCES Treatment of Notes as Variable Rate Debt Instruments 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 possible alternative treatments of the Notes, including the possible application of the contingent payment debt regulations. Certain Other United States Federal Income Tax Consequences A summary of certain United States federal income tax consequences that will apply to holders of debt securities is set forth under "United States Federal Income Tax Consequences-Debt Securities" in the Prospectus. Holders should note that the backup withholding tax rate of 31% referenced in the Prospectus under "United States Federal Income Tax Consequences-Debt Securities-Information Reporting and Backup Withholding-United States Holders" has been reduced to 30% for payments made during 2003, 29% for payments made during 2004 and 2005 and 28% for payments made during 2006 through 2010, after which time the rate will revert back to 31% absent Congressional action. In addition, the sections below replace the summaries set forth in the Prospectus under "United States Federal Income Tax Consequences-Debt Securities-Consequences to Non-United States Holders-United States Federal Estate Tax" and "United States Federal Income Tax Consequences-Debt Securities-Information Reporting and Backup Withholding-Non-United States Holders." Consequences to Non-United States Holders United States Federal Estate Tax Your estate will not be subject to United States federal estate tax on debt securities beneficially owned by you at the time of your death provided that: * any payment to you on the debt securities would be eligible for exemption from the 30% United States federal withholding tax under the rules described in the bullet points under "United States Federal Income Tax Consequences- Debt Securities-Consequences to Non-United States Holders-United States Federal Withholding Tax," without regard to the certification requirements of the fourth bullet point; and * interest on those debt securities would not have been, if received at the time of your death, effectively connected with the conduct by you of a trade or business in the United States. Information Reporting and Backup Withholding Non-United States Holders If you are a non-United States holder of debt securities, we must report annually to the IRS and to you the amount of payments we make to you and the tax withheld with respect to such payments, regardless of whether withholding was required. Copies of the information returns reporting such payments and withholding may also be made available to the tax authorities in the country in which you reside under the provisions of an applicable income tax treaty. You will not be subject to backup withholding regarding payments we make to you provided that we do not have actual knowledge or reason to know that you are a United States person and we have received from you the statement described above in the fourth bullet point under "United States Federal Income Tax Consequences-Debt Securities-Consequences to Non-United States Holders-United States Federal Withholding Tax." In addition, you will be subject to information reporting and, depending on the circumstances, backup withholding regarding the proceeds of the sale of a debt security made within the United States or conducted through United States- related intermediaries, unless the payor receives the statement described above and does not have actual knowledge or reason to know that you are a United States person, or you otherwise establish an exemption. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against your United States federal income tax liability provided the required information is furnished to the IRS. UNDERWRITING Lehman Brothers Holdings has agreed to sell to Lehman Brothers Inc. (the "Agent"), and the Agent has agreed to purchase, the principal amount of the Notes. The Agent is committed to take and pay for all of the Notes, if any are taken. The Agent proposes to offer the Notes initially at a public offering price equal to the Issue Price set forth above and to certain dealers at such price. After the initial public offering, the public offering price and other selling terms may from time to time be varied by the Agent. The Notes are a new issue of securities with no established trading market. Lehman Brothers Holdings has been advised by the Agent that it intends to make a market in the Notes, but it is not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Notes. Lehman Brothers Holdings has agreed to indemnify the Agent against certain liabilities under the Securities Act of 1933, as amended, as described in the accompanying Prospectus Supplement. Capitalized terms used herein without definition have the meanings ascribed to them in the Prospectus Supplement and Prospectus. Lehman Brothers Holdings Inc. By: /s/ Paolo Tonucci Name: Paolo Tonucci Title: Authorized Officer -----END PRIVACY-ENHANCED MESSAGE-----