424B2 1 mtng165.txt MTNG165 GLOBAL FLOATING RATE MTN Rule 424(b)(2) Registration No. 333-60474 PRICING SUPPLEMENT NO. 165 dated October 18, 2004 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.: 52517PXU0 ISIN: US52517PXU01 Specified Currency: US Dollars Principal Amount: US$575,000,000.00 Total Per Note Issue Price: US$574,446,850.00 99.9038% Agents' Commission: US$ 2,012,500.00 0.350% Proceeds to Lehman Brothers Holdings: US$572,434,350.00 99.5538% Agents: Lehman Brothers Blaylock & Partners, L.P. Loop Capital Markets M.R. Beal & Company Ramirez & Co., Inc. Siebert Capital Markets The Williams Capital Group, L.P. Agent's Capacity: [ ] As agent [X ] As principal (See "Underwriting" below.) [ ] The Notes are being offered at varying prices relating to prevailing market prices at the time of sale. [X ] The Notes are being offered at a fixed initial public offering price equal to the Issue Price. Trade Date: October 18, 2004 -- $500,000,000.00 October 19, 2004 -- $ 75,000,000.00 Original Issue Date: October 25, 2004 Stated Maturity Date: November 10, 2009 Amortizing Note: [ ] Yes [X ] No Amortization Schedule: Not applicable [ ] Fixed Rate Note [X ] Floating Rate Note [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds Rate [X ] LIBOR Telerate [ ] LIBOR Reuters [ ] Treasury Rate: Constant Maturity [ ] Yes [ ] No [ ] Prime Rate [ ] J.J. Kenny Rate [ ] Eleventh District Cost of Funds Rate [ ] Other: _______________________ Index Maturity: 3 Months Spread: Plus 0.25% LIBOR Determination Dates: Two London Business Days prior to each Interest Reset Date Interest Reset Dates: Each Interest Payment Date Interest Payment Dates: Each February 10, May 10, August 10 and November 10, commencing on February 10, 2005 Interest Computation: Interest will be computed on the basis of a 360-day year and the actual number of days elapsed "Accrue to Pay": [X ] Yes [ ] No London Business Day: A day other than a Saturday or Sunday on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market Interest Rate Calculation Agent: Citibank, N.A. Optional Redemption: Not applicable Optional Repayment: Not applicable Extension of Maturity: Not applicable Form of Note: [X ] Book-entry only (global) [ ] Certificated Depository: The Depository Trust Company Authorized Denominations: $1,000.00 and whole multiples of $1,000.00 Issuer Rating: Long-term senior unsecured debt of Lehman Brothers Holdings is currently rated A by Standard & Poor's Ratings Services, A1 by Moody's Investors Service and A+ by Fitch Ratings. CERTAIN 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 28% for payments made 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, Lehman Brothers Holdings must report annually to the IRS and to you the amount of payments Lehman Brothers Holdings makes 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 Lehman Brothers Holdings makes to you provided that Lehman Brothers Holdings does not have actual knowledge or reason to know that you are a United States person and Lehman Brothers Holdings has 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 Subject to the terms of a Purchase Agreement, dated as of October 18, 2003, between Lehman Brothers Holdings and Lehman Brothers Inc. and the other agents set forth below (collectively, the "Agents"), Lehman Brothers Holdings has agreed to sell to the Agents, and the Agents have agreed severally to purchase, the principal amounts of Notes set forth opposite their names below: Principal Amount Agents of the Notes Lehman Brothers Inc. $488,750,000 Blaylock & Partners, L.P. 14,375,000 Loop Capital Markets, LLC 14,375,000 M.R. Beal & Company 14,375,000 Muriel Siebert & Co., Inc. 14,375,000 Samuel A. Ramirez & Company, Inc. 14,375,000 The Williams Capital Group, L.P. 14,375,000 Total .................................................. $575,000,000 Under the terms and conditions of the Purchase Agreement, the Agents are committed to take and pay for all of the Notes, if any are taken. The Agents propose 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 less a concession not in excess of 0.35% of the principal amount of the Notes. The Agents may allow, and the dealers may reallow, a discount not in excess of 0.1% of the principal amount of the Notes on sales to certain other dealers. After the initial public offering, the public offering price and other selling terms may from time to time be varied by the Agents. The Notes are a new issue of securities with no established trading market. Lehman Brothers Holdings has been advised by the Agents that they may make a market in the Notes, but they are 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. Each Agent has agreed that it will, to the best of its knowledge, only offer or sell the Notes in compliance with the laws and regulations in any jurisdiction applicable to such offer or sale and it has not taken and will not take any action in any jurisdiction, other than the United States, that would permit a public offering of the Notes, or possession or distribution of any prospectus or any amendment or supplement thereto or any offering or publicity material relating to the Notes, in any country or jurisdiction where action for that purpose is required. Each Agent has represented and agreed that: * it and each of its affiliates have not offered or sold and will not offer or sell any Notes to persons in the United Kingdom prior to the expiry of the period of six months from the issue date of the Notes except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations of 1995; * it and each of its affiliates have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA") received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to Lehman Brothers Holdings; and * it and each of its affiliates have complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. Each Agent has separately further agreed that the Notes may not be offered, sold, transferred or delivered in or from The Netherlands, as part of their initial distribution or as part of any re-offering, and neither this prospectus supplement, the accompanying prospectus nor any other document in respect of the offering may be distributed or circulated in The Netherlands, other than to individuals or legal entities which include, but are not limited to, banks, brokers, dealers, institutional investors and undertakings with a treasury department, who or which trade or invest in securities in the conduct of a business or profession. Lehman Brothers Holdings has agreed to indemnify the Agents against certain liabilities under the Securities Act of 1933, as amended, as described in the Prospectus. Certain of the underwriters of the Notes are affiliated with commercial banking institutions that may from time to time in the ordinary course of their business loan money to and have other customary banking relationships with Lehman Brothers Holdings and its affiliates. Lehman Brothers Holdings will pay certain expenses, expected to be approximately $75,000, associated with the offer and sale of the Notes. Certain of the Agents may make the securities available for distribution on the Internet through a proprietary website and/or a third-party system operated by Market AxessCorporation, an Internet-based communications technology provider. Market AxessCorporation is providing the system as a conduit for communications between such Agents and their customers and is not a party to this offering. Market AxessCorporation, a registered broker-dealer, will receive compensation from such Agents based on transactions that such Agents conduct through the system. Such Agents will make the securities available to their customers through the Internet distributions, whether made through a proprietary or third-party system, on the same terms as distributions made through other channels. Certain of the Agents may not be U.S. registered broker-dealers and accordingly will not effect any sales within the United States except in compliance with applicable U.S. laws and regulations, including the rules of the NASD. Lehman Brothers Holdings expects to deliver the Notes against payment on or about the date specified under Original Issue Date above, which is the fifth business day following the date of this pricing supplement. Under Rule 15c6-1 of the SEC under the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in three business days, unless the parties to any such trade expressly agree otherwise. Accordingly, if any purchaser wishes to trade the Notes on the date of this pricing supplement or the date thereafter, it will be required, by virtue of the fact that the Notes initially will settle on the fifth business day following the date of this pricing supplement, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Capitalized terms used herein without definition have the meanings ascribed to them in the Prospectus Supplement and accompanying Prospectus. Lehman Brothers Holdings Inc. By: /s/ Paolo Tonucci Name: Paolo Tonucci Title: Authorized Officer