Lehman Brothers Financial SA (LEHNQ)

[Joe Stocks]

The CTs are in class 10B.
ECAPs are not in class 10A. ECAPs are in the LBIE bk in Europe. The ECAPs had a conversion clause to LBHI preferreds. Under the terms of the ECAPS, upon the occurrence of certain trigger events (which included a bankruptcy of LBHI), the general partner of the LPs was required to take all reasonable steps to substitute the ECAPS for preferred stock of LBHI. The substituted preferred stock would be “fully-paid non-cumulative preferred stock (equity) issued directly by LBHI.
If those shares would have been issued they would have been in class 12 as equity shares.

Of course we know the owners to the ECAPs fought this in court and won. They felt they would get a better return with in the LBIE BK framework.

The ECAPs have no bearing on the CTs. Anyone discussing them in relationship to some kind of parity to the CTs is very much misinformed and have not done their homework.