[R]10:40AM New York – Lehman Brothers plunges 10% after it raises $6 billion and declared a loss.[/R]

Lehman Brothers expects a loss of $2.8 billion or $5.14 per share for the quarter ended on May 31. The investment broker earned $489 million or 81 cents per share in the first quarter and $1.3 billion or $2.21 per share in the same quarter a year ago. Lehman reported its quarterly results one week early and intends to raise $6 billion.

Lehman expects to report net revenues for the second quarter of fiscal 2008 of negative ($0.7) billion, compared to $3.5 billion for the first quarter of 2008 and $5.5 billion for the second quarter of fiscal 2007. Net revenues for the second quarter of fiscal 2008 reflect negative mark to market adjustments and principal trading losses, net of gains on certain debt liabilities.

Lehman issued common stock and issue non-cumulative mandatory convertible preferred stock offering that has a liquidation preference of $1,000 per share. The stock will be converted to common stock in three years.

Lehman priced a $4.0 billion public offering of 143 million shares of common stock at $28.00 per share. The Firm also announced that it priced a $2.0 billion public offering of 2.0 million shares of 8.75% preferred stock, Series Q.

The preferred stock has a liquidation preference of $1,000 per share, and will pay quarterly cash dividends on a non-cumulative basis, when, as and if declared by the board of directors, at a rate of 8.75% per year on the liquidation preference.

Each share of the preferred Stock will be mandatorily converted on July 1, 2011 into between 30.2663 shares and 35.7142 shares of Lehman Brothers common stock, unless earlier converted at the option of the holder. The conversion rate is subject to adjustment in certain circumstances.