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REGISTRATION NO. 33-65674
NASD File No. 930707011
Rule 424(b)(2)
AMENDED PRICING SUPPLEMENT NO. 40
DATED APRIL 5, 1994
(To Prospectus dated October 4, 1993 as supplemented by
a Prospectus Supplement dated March 4, 1994)
LEHMAN BROTHERS HOLDINGS INC.
Medium Term Notes, Series E
Due 9 Months or More from Date of Issue
(Indexed Notes)
___________________________
Principal Amount: $20,000,000.
Stated Maturity: January 15, 1995
Issue Date: April 8, 1994
Issue Price: 100%
Agent's Commission: .10%*
Interest Payment Dates: July 15, 1994, October 15, 1994 and
January 15, 1995 (or, if any such day
is not a Business Day, the next
following Business Day)
Initial Interest Rate: To be determined on the initial
Interest Determination Date. See
"Description of Indexed Notes -
Interest".
Interest Rate Basis: The interest rate for any Interest
Payment Period will be equal to 5.00%
times the Index Ratio for such Interest
Payment Period. See "Description of
Indexed Notes-Interest" below.
__________________
* The Agent has purchased the Indexed Notes as principal in this
transaction and may resell any of such Indexed Notes to another
broker-dealer (acting as principal for the purposes of resale) at
a discount and the discount allowed to such broker-dealer will
not exceed the discount received by the Agent in such transaction.
Spread: None
Spread Multiplier: None
Interest Determination
Dates: Second Business Day preceding each
Interest Payment Date
Calculation Agent: Lehman Brothers Special Financing Inc.
Interest Payment Period: Quarterly
Interest Reset Period: Quarterly
Form of Note: Book-Entry Note
The aggregate principal amount of this offering is $20,000,000
and relates only to Pricing Supplement No. 40. Medium-Term
Notes, Series E may be issued by the Company in an aggregate
principal amount of up to $2,500,000,000 and, to date, including
this offering, an aggregate of $1,301,150,000 Medium-Term Notes,
Series E have been issued and are outstanding.
DESCRIPTION OF INDEXED NOTES
I. GENERAL
The following description of the particular terms of the Indexed
Notes (as defined below) supplements, and to the extent
inconsistent therewith replaces, the description of the general
terms and provisions of the Notes set forth in the accompanying
Prospectus Supplement and the description of Debt Securities set
forth in the accompanying Prospectus, to which descriptions
reference is hereby made. All terms used herein but not
otherwise defined herein and which are defined in the
accompanying Prospectus or Prospectus Supplement shall have the
meanings therein assigned to them.
II. INTEREST
Interest on the Indexed Notes in respect of an Interest Payment
Period (as defined below) will be payable quarterly on July 15,
1994, October 15, 1994 and January 15, 1995, or in the event that
any such day is not a Business Day, then on the immediately
following day that is a Business Day (each such day, an "Interest
Payment Date"). With respect to any Interest Payment Date,
interest on the Indexed Notes will accrue from and including the
previous Interest Payment Date (or in the case of the first
Interest Payment Date, April 8, 1994) to but excluding such
Interest Payment Date (or in the case of the last Interest
Payment Date, to but excluding January 15, 1995) (each, an
"Interest Payment Period").
For any Interest Payment Period, the interest rate will be equal
to 5.00% times the Index Ratio for such Interest Payment Period,
and interest payable will be calculated based on the actual
number of days in such Interest Payment Period and a year
consisting of 360 days. The "Index Ratio" for an Interest
Payment Period will be determined by dividing (i) the number of
days in such Interest Payment Period for which LIBOR (as defined
below) falls in the range specified below for such Interest
Payment Period by (ii) the number of days in such Interest
Payment Period.
LIBOR Range
Greater than and Less than
Interest Payment Period or equal to or equal to
- ------------------------ ------------ ------------
July 15, 1994 0.00% 4.75%
October 15, 1994 0.00% 5.00%
January 15, 1995 0.00% 5.25%
The Interest Determination Date with respect to each Interest
Payment Date will be the second Business Day preceding such
Interest Payment Date. Determinations of the Index Ratio will be
made by Lehman Brothers Special Financing Inc. (the "Calculation
Agent") on the relevant Interest Determination Date.
III. INDEX RATIO
For purposes of calculating the Interest Ratio, "LIBOR" for any
day in an Interest Payment Period will be established by the
Calculation Agent and will equal the rate for United States
dollar deposits for three months which appears on Telerate Page
3747 (as defined below) as of 11:00 A.M., London time, for the
second preceding London Banking Day (the "LIBOR Determination
Date") provided that such rate appears on Telerate Page 3747 for
such date.
If such rate does not appear, LIBOR will be determined on such
LIBOR Determination Date as described in the paragraph below.
Telerate Page 3747 means the display designated as such on the
Dow Jones Telerate Service (or such other page as may replace
such page on that service, or such other service as may be
nominated as the information vendor for the purpose of displaying
London inter-bank offered rates of major banks). "London Banking
Day" is a day on which banking institutions in the City of
London, England are not required or authorized by law to be
closed.
If such rate for such LIBOR Determination Date does not appear on
Telerate Page 3747, the Calculation Agent will request of each of
the Reference Banks (which shall be major banks that are engaged
in transactions in the London inter-bank market, selected by the
Calculation Agent) to provide the Calculation Agent with its
offered quotation for United States dollar deposits for three
months, beginning on the second London Banking Day following such
date, to prime banks in the London inter-bank as of 11:00 A.M.,
London time, on such date. If at least two Reference Banks
provide the Calculation Agent with such offered quotations, LIBOR
on such date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of a percent) of all such
quotations. If on such date fewer than two of the Reference
Banks provide the Calculation Agent with quotations, LIBOR on
such date will be the arithmetic mean (rounded upwards, if
necessary, to the nearest one-sixteenth of a percent) of the
offered per annum rates which one or more leading banks in The
City of New York selected by the Calculation Agent are quoting as
of 11:00 A.M., New York City time, on such date to leading
European banks for United States dollar deposits for three
months; provided, however, that if such banks are not quoting as
described above, LIBOR will be the LIBOR applicable to the
immediately preceding LIBOR Determination Date.
IV. PRINCIPAL REPAYMENT
The Indexed Notes mature on January 15, 1995, and the principal
amount of the Indexed Notes will be repaid on such day (or if
such day is not a Business Day, on the following Business Day).
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
Set forth below is a summary of certain United States federal
income tax consequences resulting from the ownership of Indexed
Notes. Such consequences are in addition to those summarized in
the accompanying Prospectus Supplement under the heading "Certain
United States Federal Income Tax Consequences." This summary
does not address special rules which may apply to particular
types of investors.
TAXATION OF U.S. INVESTORS
The Indexed Notes will constitute Short-Term Original
Issue Discount Notes because the term of the Indexed Notes is
less than one year. See "Certain United States Federal Income
Tax Consequences - Original Issue Discount" in the Prospectus.
For United States Holders subject to the rules for short term
obligations, the appropriate tax accounting for interest payable
on the Indexed Notes is not clear. The Internal Revenue Service
has issued proposed regulations under the original issue discount
provisions for debt instruments providing for contingent
payments. Whether these regulations would apply and how interest
payable on the Indexed Notes would be taken into account under
the proposed regulations is unclear. Because of the uncertainty
regarding the appropriate tax accounting treatment for the
Indexed Notes, potential investors are advised to consult their
tax advisors as to the Indexed Notes.
TAXATION OF CERTAIN FOREIGN INVESTORS
Payments with respect to an Indexed Note (other than
payments of interest to certain parties related to the Issuer),
including payments on any sale or disposition of such Indexed
Note, will not be subject to United States withholding tax,
provided that the non-United States Holder complies with
applicable certification requirements.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Distributions made on the Indexed Notes and proceeds
from the sale of Indexed Notes to or through certain brokers may
be subject to a "backup" withholding tax of 31% of "reportable
payments" (including interest accruals, original issue discount,
and, under certain circumstances, distributions in reduction of
principal amount) unless, in general, the Noteholder complies
with certain procedures or is an exempt recipient. Any amounts
so withheld from distributions on the Indexed Notes would be
refunded by the Internal Revenue Service or allowed as a credit
against the Noteholder's Federal income tax.
Reports will be made to the Internal Revenue Service
and to Noteholders that are not excepted from the reporting
requirements.
OTHER CONSIDERATIONS
RISKS ASSOCIATED WITH PAYMENTS OF INTEREST ON THE INDEXED NOTES
The interest rate payable on the Indexed Notes in
respect of any Interest Payment Period will be reduced for each
day in such Interest Payment Period that LIBOR exceeds the top
rate in the range applicable to such Interest Payment Period. An
investor in the Indexed Notes may receive no payment in respect
of interest for one or more Interest Payment Periods.
