REGISTRATION NO. 33-65674
NASD File No. 930707011
Rule 424(b)(2)
PRICING SUPPLEMENT NO. 31
DATED FEBRUARY 25, 1994
(To Prospectus dated October 4, 1993 as supplemented by
a Prospectus Supplement dated October 4, 1993)
LEHMAN BROTHERS HOLDINGS INC.
Medium Term Notes, Series E
Due 9 Months or More from Date of Issue
(Floating Rate Notes)
___________________________
Principal Amount: $10,000,000. See
"Description of Floating Rate
Notes-Maturity Amount" below.
Stated Maturity: June 14, 1996
Issue Date: March 14, 1994
Issue Price: 100%
Agent's Commission: .25%
Interest Payment Dates: The 14th calendar day of each
March, June, September and
December (or, if any such day
is not a Business Day, the
next following Business Day),
commencing on June 14, 1994
and ending on the Stated
Maturity
Interest Reset Dates: Each Payment Date
Initial Interest Rate: To be determined on the
initial Interest
Determination Date. See
"Description of Floating Rate
Notes - Interest".
Interest Rate: On any Interest Determination
Date (a) 8.50% plus (b)
(LIBOR (with a designated
maturity of three months)
minus ITL CMS (with a
designated maturity of three
years)), but not less than
zero.
See "Description of Floating
Rate Notes-Interest" below.
Day Count Basis: 30/360
Spread: None
Spread Multiplier: None
Interest Determination
Dates: Second London Banking Day
preceding each of March 14,
1994 and each Interest
Payment Date thereafter
Calculation Agent: Lehman Brothers Special
Financing Inc.
Interest Payment Period: Quarterly
Interest Reset Period: Quarterly
Maturity Amount: See "Description of Floating
Rate Notes - Maturity
Amount."
Form of Note: Book-Entry Note
The aggregate principal amount of this offering is
$10,000,000 and relates only to Pricing Supplement No.
31. 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 $1,137,550,000 Medium-Term Notes,
Series E have been issued and are outstanding.
DESCRIPTION OF FLOATING RATE NOTES
I. GENERAL
The following description of the particular terms of
the Floating Rate 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 Floating Rate Notes in respect of an
Interest Payment Period (as defined below) will be
payable quarterly on the fourteenth calendar day of
each March, June, September and December, 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"), beginning
on June 14, 1994 and ending on the Stated Maturity.
With respect to any Interest Payment Date, interest on
the Floating Rate Notes will accrue on the principal
amount thereof from and including the previous Interest
Payment Date, or in the case of the first Interest
Payment Date, March 14, 1994, through but excluding
such Interest Payment Date (each, an "Interest Payment
Period"), calculated on the basis of a 360-day year
composed of 12 30-day months.
The Interest Rate for any Interest Payment Period shall
equal (a) 8.50% plus (b) ( LIBOR minus ITL CMS), but
not less than zero.
For the purpose of calculating the Interest Rate for
any Interest Payment Period, the following terms have
the following meanings:
"LIBOR" with respect to any Interest Payment Period
shall be determined as of the Interest Determination
Date preceding such Interest Payment Period by the
Calculation Agent in accordance with the procedures set
for determining "LIBOR Telerate" for a period of three
months set forth in the accompanying Prospectus
Supplement.
"ITL CMS" with respect to any Interest Payment Period
shall be established by the Calculation Agent and shall
equal the arithmetic mean of the bid and offered rates
for Italian lira interest rate swaps for three years
which appear on the Reuters Screen ICAS Page (as
defined below) as of 11:00 A.M., London time, on the
second London/Milan Banking Day prior to the first day
of such Interest Payment Period; provided that if such
rates do not appear on the Reuters Screen ICAS Page on
such date, ITL CMS shall be determined on such date as
described in the paragraph below. Reuters Screen ICAS
Page means the display designated as page "ICAS" on the
Reuter Monitor Money Rates 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 Italian lira interest
rate swap rates). "London/Milan Banking Day" is a day
on which banking institutions in the City of London,
England and Milan, Italy are not required or authorized
by law to be closed.
If on such date such rates do not appear on Reuters
Screen Page ICAS, the Calculation Agent will request of
each of four major swap dealers of the highest credit
rating that provide a market in Italian lira interest
rate swaps, selected by the Calculation Agent (each, an
"ITL CMS Reference Market-maker"), to provide the
Calculation Agent with the arithmetic mean of its bid
and offered quotations, on an annual, bond-equivalent
basis, for Italian lira interest rates swaps of three
years to counterparties of the highest credit rating as
of 11:00 A.M., London time, on such date. If more than
three quotations are provided, ITL CMS will be the
arithmetic mean (rounded upwards, if necessary, to the
nearest one-sixteenth of a percent) of the quotations,
without regard to the quotations having the highest and
lowest values. If exactly three quotations are
provided, ITL CMS will be the quotation remaining after
disregarding the highest and lowest quotations. If two
ITL CMS Reference Market-makers provide the Calculation
Agent with such quotations, ITL CMS on such date shall
be the arithmetic mean (rounded upwards, if necessary,
to the nearest one-sixteenth of a percent) of both such
quotations. If on such date fewer than two of the ITL
CMS Reference Market-makers provide the Calculation
Agent with quotations, ITL CMS on such date will be the
ITL CMS applicable to the immediately preceding
Interest Payment Period.
III. MATURITY AMOUNT
The amount payable at Maturity in respect of the
principal amount of the Floating Rate Notes (the
"Maturity Amount") will be equal to the product of (a)
the principal amount of the Floating Rate Notes and (b)
one (1) plus the product of (i) fifteen (15) and (ii)
(5.30% minus FFr CMS), but in no event will the
Maturity Amount be less than zero. For the purpose of
calculating the Maturity Amount, "FFr CMS" shall be
established by the Calculation Agent and shall equal
the arithmetic mean of the bid and offered rates for
French franc interest rate swaps for three years which
appear on the Reuters Screen ICAT Page (as defined
below) as of 11:00 A.M., London time, on the second
London/Paris Banking Day prior to the Maturity Date;
provided that if such rates do not appear on the
Reuters Screen ICAT Page on such date, FFr CMS shall be
determined on such date as described in the paragraph
below. Reuters Screen ICAT Page means the display
designated as page "ICAT" on the Reuter Monitor Money
Rates 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 French franc interest rate swap rates).
"London/Paris Banking Day" is a day on which banking
institutions in the City of London, England and Paris,
France are not required or authorized by law to be
closed.
If on such date such rates do not appear on Reuters
Screen Page ICAT, the Calculation Agent will request of
each of four major swap dealers of the highest credit
rating that provide a market in French franc interest
rate swaps, selected by the Calculation Agent (each, a
"FFr CMS Reference Market-maker"), to provide the
Calculation Agent with the arithmetic mean of its bid
and offered quotations, on an annual, bond-equivalent
basis, for French franc interest rates swaps of three
years to counterparties of the highest credit rating as
of 11:00 A.M., London time, on such date. If more than
three quotations are provided, FFr CMS will be the
arithmetic mean (rounded upwards, if necessary, to the
nearest one-sixteenth of a percent) of the quotations,
without regard to the quotations having the highest and
lowest values. If exactly three quotations are
provided, FFr CMS will be the quotation remaining after
disregarding the highest and lowest quotations. If two
FFr CMS Reference Market-makers provide the Calculation
Agent with such quotations, FFr CMS on such date shall
be the arithmetic mean (rounded upwards, if necessary,
to the nearest one-sixteenth of a percent) of both such
quotations. If on such date fewer than two of the FFr
CMS Reference Market-makers provide the Calculation
Agent with quotations, FFr CMS on such date will be the
FFr CMS applicable to the immediately preceding
Interest Payment Period.
The Floating Rate Notes mature on June 14, 1996, and
the Maturity Amount will be paid 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 Floating Rate Notes. Such consequences
are in addition to those summarized in the accompanying
Prospectus Supplement under the heading "Certain United
States Federal Income Tax Consequences."
Taxation of U.S. Investors
While the matter is not free from doubt, the Floating
Rate Notes should constitute debt obligations of the
Company for U.S. federal income tax purposes, and no
portion of the issue price of the Floating Rate Notes
should be separately allocated to the contingent
feature of the Floating Rate Notes. The Internal
Revenue Service, however, may argue that the Floating
Rate Notes should be treated as creating, in whole or
in part, something other than a debt obligation. For
example, all or a portion of a Holder's rights under
the Floating Rate Notes could be characterized as a
cash-settled forward contract with respect to the level
of FFr CMS.
If the Floating Rate Notes are treated as indebtedness
of the Company for federal income tax purposes, the
appropriate tax accounting is not entirely clear. The
Floating Rate Notes may be treated as consisting of a
debt obligation paying a fixed principal amount, and a
forward contract settled in cash with the proceeds from
the principal payment at maturity. The interest
payments, including any interest payment made on the
Stated Maturity, may be treated as ordinary interest
income as such amounts are determined. Under this
approach, a Holder would recognize a gain or loss,
which may be capital, to the extent the Maturity Amount
differs from a Holder's basis in the Floating Rate
Notes.
The Internal Revenue Service, however, has issued
proposed regulations under the original issue discount
provisions of the Internal Revenue Code for debt
instruments providing for contingent payments which
would provide significantly different treatment of the
Floating Rate Notes. Although the proposed regulations
are not at present effective, they are proposed to be
retroactively effective once adopted in final form.
These regulations have been criticized and the IRS
recently released draft proposed regulations which
would have revoked the outstanding proposed regulations
and provided substantially revised rules. Prior to
issuance, however, these draft proposed regulations
were withdrawn. The IRS has indicated that it may
replace the proposed regulations with a rule that
requires some minimum amount of interest income to be
accrued on all contingent payment debt instruments. It
is impossible to predict whether, or in what manner,
the proposed regulations may be modified and whether
any modifications would apply to the Floating Rate
Notes or whether any such proposed regulations would
become final regulations.
Taxation of Certain Foreign Investors
Amounts paid to a nonresident alien individual, foreign
corporation, foreign partnership or foreign estate or
trust will be exempt from U.S. withholding tax.
Backup Withholding
See the discussion of "Certain United States Federal
Income Tax Consequences-- Backup Withholding and
Information Reporting" in the accompanying Prospectus
Supplement.
OTHER CONSIDERATIONS
RISKS ASSOCIATED WITH PAYMENTS OF INTEREST ON
THE FLOATING RATE NOTES AND THE MATURITY
AMOUNT
Pursuant to the formula employed in determining the
Interest Rate, the amount of interest payments on the
Floating Rate Notes may vary substantially from
Interest Payment Period to Interest Payment Period.
Investors in the Floating Rate Notes will receive
interest at a rate less than 8.50% per annum to the
extent that the 3-year Italian lira interest rate swap
rate exceeds the 3-month LIBOR rate and consequently
may receive no interest payment in respect of one or
more Interest Payment Periods.
Pursuant to the formula employed in determining the
Maturity Amount, an investor in the Floating Rate Notes
will receive a payment in respect of the Maturity
Amount that is less than par if the 3-year French franc
interest swap rate immediately prior to the Maturity
Date exceeds 5.30%. For each 1% that the 3-year French
franc interest swap rate immediately prior to the
Maturity Date exceeds 5.30%, the payment received by
the investor in respect of the Maturity Amount will be
reduced by 15%. Such formula does not ensure any
minimum payment in respect of the Maturity Amount.
