Lehman Brothers Financial SA (LEHNQ)

[Joe Stocks]

>>Cts are indeed a preferred vehicle and therefore part of OBS.<<

That is incorrect. OBS refers to equitym and is equity. Look at the prospectus of LEHJQ, traditional preferreds for example;
https://www.sec.gov/Archives/edgar/data/806085/000104746908000953/a2182499z424b2.htm

It says this;

The Preferred Stock is equity and is subordinate to our existing and future indebtedness.
Shares of Preferred Stock are equity interests in Lehman Brothers Holdings and do not constitute indebtedness.

Look at the prospectus for any of the CTs. There is no mention of them being equity, but much said about them constituting indebtedness. The prospectus says they are equal to the most senior preferred. That only means they are equal to the other CTs as the CTs are the most senior preferred. Of course the CTs out rank the traditional preferred as to liquidation as being debt. But still mention of them being any form of equity. If they were, it would be addressed to the prospectus. Just because the CTs are senior preferreds in there name and junior debt, does not mean they are equity or has any connection to it other than ranking in liquidation.