Replies to post #1764 on Lehman Brothers Holdings Inc. (fka LEHMQ)

[novicetrader]

A post from Yahoo:

GREAT NEWS SHAREHOLDERS~!!!!! 20-Sep-08 04:57 am I will give you the full court update later todoy but most importantly the notice to file for a shareholders committee was filed in time and it appears that it should get approved next week..This means we have a seat at the table...Lehmans assets if not sold off in fire sale fashion should bring huge value to the shareholders....The brokerage business had to go quich but all the other businesses do not...and will be sold at fair value...additionally, the government will absorb Lehmans bas real estate assets leaving Lehman a very very profitable going concern....there is more than hope here and the creditors thought they could run with our money...they were mistaken!!!

[Joe Stocks]

Yes, there is a difference in preferreds and how they are secured. I wrote this and posted here on the 15th. Also, AIG has some exchange traded DEBT that looks interesting. AFF and AVF. Joe

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

If you are interested in playing the LEH BK you may want to look at the preferred shares. More specifically you want to look at the M, N, K, L series. Schwabs symbols are LEHpM, etc.

These are trust prefrreds shares. That meaning that they are secured by an subordinated note. The dividend paid is really interest passed on from the note. This is really more like debt. The reason I mention is that with these you have a much better seat at the BK table. The common goes first, then the regular preferreds, then the junior subordinated notes like these are linked to.

These all have a face value of $25.00. Volume is thinner and spreads are wide. Daytrading them can be tough. I bought some today for as cheap as 6 cents. These were selling for $10.00 a share Friday.

Here's a description for the K series.

SECURITY DESCRIPTION: Lehman Brothers Holdings Capital Trust III, 6.375% Preferred Securities, Series K, liquidation amount $25 per share, guaranteed by Lehman Brothers Holdings Inc. (NYSE: LEH), redeemable at the issuer's option on or after 3/15/2008 at $25 per share plus accrued and unpaid dividends, maturing 3/15/2052, distributions of 6.375% ($1.59375) per annum are paid quarterly on 3/15, 6/15, 9/15 & 12/15 to holders of record one business day prior to the payment date while the securities remain in book-entry form. The company has the right, at any time, to defer dividend payments for up to 20 consecutive quarters (but not beyond the maturity date). The trust's assets consist of the 6.375% Subordinated Deferrable Interest Debentures due 3/15/2052 which were purchased from the company using the funds generated from the sale of the trust preferred securities. See the IPO prospectus for further information on the trust preferred securities by clicking on the ‘Link to IPO Prospectus’ provided below. <<
http://www.quantumonline.com/search.cfm?tickersymbol=LEH-K&sopt=symbol

What is kinda neat is the average investor is unaware of these and don't know these trade like stocks.

So, why buy the common when you can buy the preferred cheaper? If you think their will be anything left keep in mind that these shares have a insecured claim of $25 per share in the BK process. These in theory have to be made whole before the common receives a penny.

RISKY. Do your own DD.

[Anonymous Nobody]

Avoid the preferred equities, they are higher than common but still an equity subordinate to debt. The preferred K L M N are debt, ranked higher than the common and the preferred equity, but still below the senior debt.

Ohmymookies posted the terms so people could understand. Before you invest read all this guy's posts regarding k l m and n, especially where he quotes the prospectus.

http://investorshub.advfn.com/boards/profile.asp?user=112490