-----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, DJCTr4aJ1GYm+u1AZ0262G37ELpfln0v1+5aBEFmhPE578KPOTfyE7RiZftHG8Ea PqRm+G9COsQiCJYwCRIZBQ== 0000806085-05-000146.txt : 20050707 0000806085-05-000146.hdr.sgml : 20050707 20050707161645 ACCESSION NUMBER: 0000806085-05-000146 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20050707 DATE AS OF CHANGE: 20050707 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: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-121067 FILM NUMBER: 05943618 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 424B3 1 mtnh12.txt MTNH12 RANGE NOTE Rule 424(b)(3) Registration No. 333-121067 PRICING SUPPLEMENT NO. 12 dated July 5, 2005 to Prospectus Supplement dated May 18, 2005 and Prospectus dated May 18, 2005 LEHMAN BROTHERS HOLDINGS INC. Medium-Term Notes, Series H This Pricing Supplement supplements the terms and conditions in, and incorporates by reference, the Prospectus, dated May 18, 2005, as supplemented by the Prospectus Supplement, dated May 18, 2005 (as so supplemented, together with all documents incorporated by reference therein, the "Prospectus"), and should be read in conjunction with the Prospectus. Unless otherwise defined in this Pricing Supplement, terms used herein have the same meanings as are given to them in the Prospectus. CUSIP No.: 52517PA27 ISIN: US52517PA271 Specified Currency: Principal: U.S. Dollars Interest: U.S. Dollars Principal Amount: $6,000,000 Total Per Note Issue Price: $6,000,000 100% Agent's Commission: $ 0 0% Proceeds to Lehman Brothers Holdings: $6,000,000 100% On the Issue Date, we may, without the consent of the holders of Notes, issue additional notes similar to these Notes in all respects except for the Issue Price. Following the Issue Date, we may, without the consent of the holders of Notes, create and issue additional notes similar to these Notes in all respects except for the Issue Date, Issue Price and the payment of interest accruing prior to the Issue Date of such additional notes. All such additional notes will be consolidated and form a single tranche with, have the same CUSIP and ISIN numbers as and trade interchangeably with these Notes. Agent: Lehman Brothers Agent's Capacity: [X ] As principal [ ] As agent Trade Date: July 5, 2005 Issue Date: July 27, 2005 Stated Maturity Date: July 27, 2020, subject to Optional Redemption; provided that if such day is not a New York or London business day, then such day will be the following New York and London business day unless such day falls in the following month in which case it will be the preceding New York and London business day. Date From Which Interest Accrues: [X ] Issue Date [ ] Other: _____________ [X ] Fixed Rate Note Interest Rate per Annum: 7.50%, subject to the "Interest Accrual" provision described below. [ ] Floating Rate Note [ ] CD Rate [ ] Commercial Paper Rate [ ] Federal Funds (Effective) Rate [ ] Federal Funds (Open) Rate [ ] LIBOR Telerate [ ] LIBOR Reuters [ ] EURIBOR [ ] Treasury Rate: Constant Maturity [ ] Yes [ ] No [ ] Prime Rate [ ] Eleventh District Cost of Funds Rate [ ] Other: See "Interest Rate per Annum" below Spread: Not applicable Initial Interest Rate: Not applicable Minimum Rate: Not applicable Maximum Rate: Not applicable Interest Reset Dates: Daily, commencing on July 27, 2005 Interest Payment Dates: Each October 27, January 27, April 27, and July 27, commencing on October 27, 2005, subject to Optional Redemption; provided that if such day is not a New York or London business day, then such day will be the following New York and London business day unless such day falls in the following month in which case it will be the preceding New York and London business day, and provided further that the final Interest Payment Date for any Notes shall be the applicable maturity date. Interest Accrual: From July 27, 2005 until the Stated Maturity Date, 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 the applicable Interest Rate 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 (British Banker Association) 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 3747 (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 Interest Rate Calculation Agent will determine LIBOR in the manner described in the Prospectus Supplement. LIBOR Range: Period LIBOR Original Issue Date- 0% (minimum) to Stated Maturity Date 7.0% (maximum) LIBOR Observation Date: With respect to each day that is a London business day that does not occur during the LIBOR Suspension Period, that London business day. With respect to each day that is not a London business day not occurring during the LIBOR Suspension Period, the last preceding London business day. With respect to each day occurring during the LIBOR Suspension Period, the LIBOR Observation Date will be the last London business day preceding the first day of such LIBOR Suspension Period. LIBOR Suspension Period: The period beginning on the fifth New York and London business day prior to but excluding each Interest Payment Date (including the Stated Maturity Date). Adjusted: [ ] Yes [X ] No Interest Rate Calculation Agent: Lehman Brothers Special Financing Optional Redemption: The Notes may be redeemed 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 October 27, 2005. Notice of redemption will be given not less than five New York and London business days prior to the redemption date. Form of Note: [X ] Book-entry only (global) [ ] Certificated 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 London business days during the applicable period, in which event no interest will accrue for the related days during the period. As a result, less interest may be payable on the Notes than on a conventional fixed rate debt security issued by Lehman Brothers Holdings at the same time. 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 January 27, 1987 6.250 April 29, 1996 5.562 April 27, 1987 7.500 July 29, 1996 5.812 July 27, 1987 7.250 October 28, 1996 5.625 October 27, 1987 7.875 January 27, 1997 5.688 January 27, 1988 7.250 April 28, 1997 6.062 April 27, 1988 7.438 July 28, 1997 5.812 July 27, 1988 8.562 October 27, 1997 5.812 October 27, 1988 8.688 January 27, 1998 5.625 January 27, 1989 9.562 April 27, 1998 5.781 April 27, 1989 10.062 July 27, 1998 5.750 July 27, 1989 8.625 October 27, 1998 4.988 October 27, 1989 8.438 January 27, 1999 4.972 January 29, 1990 8.500 April 27, 1999 5.060 April 27, 1990 9.000 July 27, 1999 5.642 July 27, 1990 8.125 October 27, 1999 6.140 October 29, 1990 8.000 January 27, 2000 6.220 January 28, 1991 7.125 April 27, 2000 6.612 April 29, 1991 6.312 July 27, 2000 6.890 July 29, 1991 6.312 October 27, 2000 6.700 October 28, 1991 5.500 January 29, 2001 5.376 January 27, 1992 4.250 April 27, 2001 4.230 April 27, 1992 4.250 July 27, 2001 3.716 July 27, 1992 3.625 October 29, 2001 2.220 October 27, 1992 3.688 January 28, 2002 2.022 January 27, 1993 3.438 April 29, 2002 2.098 April 27, 1993 3.312 July 29, 2002 1.830 July 27, 1993 3.562 October 28, 2002 1.705 October 27, 1993 3.438 January 27, 2003 1.342 January 27, 1994 3.375 April 28, 2003 1.268 April 27, 1994 4.625 July 28, 2003 1.126 July 27, 1994 5.312 October 27, 2003 1.221 October 27, 1994 6.000 January 27, 2004 1.176 January 27, 1995 6.625 April 27, 2004 1.348 April 27, 1995 6.312 July 27, 2004 1.960 July 27, 1995 5.875 October 27, 2004 2.255 October 27, 1995 5.875 January 27, 2005 2.940 January 29, 1996 5.312 April 27, 2005 3.414 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. 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. The 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. The 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 a 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. The Agent has separately further agreed that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell in the Netherlands anyNotesother than to persons who trade or invest in securities in the conduct of a profession or business (which include banks, stockbrokers, insurance companies, investment undertakings, pension funds, other institutional investors and finance companies and treasury departments of large enterprises). It is expected that delivery of the Notes will be made against payment therefor more than three business days following the date of this pricing supplement. 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, purchasers who wish to trade the securities on any day prior to the third business day before the settlement date will be required to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement. -----END PRIVACY-ENHANCED MESSAGE-----