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To: Smiling Bob who wrote (13706)	4/11/2008 10:46:54 AM
From: Smiling Bob	Respond to of 19256

Ooops Forgot mkt likes bad news LEH shiftily shifting debt again. Lehman Moved to Turn Unsold Debt to Cash: WSJ LEHMAN, DEBT, SUBPRIME CRISIS, By Reuters CNBC.com \| 11 Apr 2008 \| 08:22 AM ET Lehman Brothers Holdings repackaged unsold debt and used the Federal Reserve's new borrowing facility to convert loans that investors mostly rejected into cash to finance its business, the Wall Street Journal reported. According to the Journal, Lehman transferred $2.8 billion in loans that included some risky leveraged buyout debt into a new investment entity called Freedom. Freedom then issued debt securities backed by the loans, and $2.26 billion of the securities got investment-grade credit rankings from Moody's and Standard & Poor's, according to the report. The bank used some of those securities as collateral for a low-interest, short-term cash loan from the Federal Reserve, the Journal said, citing people familiar with the matter. The move was meant as a test to see what the Federal Reserve would accept, and the size of the loan was not material, the Journal added, citing a person familiar with the matter. Lehman representatives and the Federal Reserve could not be reached immediately for comment.