Exhibit 99.1

LBT Note Issuance Valuation Memorandum

This memorandum is intended to provide information to all parties regarding the methodologies Lehman Brothers Holdings Inc. (“LBHI”) is using to value each of the notes issued through the European Medium Term Note Program (the “EMTN Program”) and the German Note Issuance Programme, the Swiss Certificate Programme and the Italian European Inflation Linked Programme (collectively, the “Non EMTN Programs”). These methodologies will be used by LBHI to evaluate claims filed against it as guarantor based on the notes issued by Lehman Brothers Treasury Co., B.V. (“LBT”) under the EMTN Program and Non-EMTN Programs (collectively, the “LBT Issued Notes”). While this memorandum relates only to the LBT Issued Notes, these methodologies may be further used by LBHI to evaluate claims filed against it based on notes issued by LBHI under the EMTN Program and/or notes issued under the Non EMTN Programs and guaranteed by LBHI.

Lehman Brothers provided investment opportunities to its clients via the issuance of LBT Issued Notes. The EMTN Program and Non-EMTN Programs were investment programs arranged by Lehman Brothers International (Europe) (“LBIE”) under which LBT, among other entities, issued structured notes to individuals and financial institutions. These notes predominately provide that the return at maturity and/or the payment of periodic interest is linked to the performance of an underlying asset or groups of assets including global indices, single stocks, currencies, interest rates, and various credit derivative instruments and baskets thereof (“Underlying” or “Underlyings”). In some instances principal and/or interest due under such notes may be partially or wholly “protected”. Some structured notes were relatively simple notes that paid interest at fixed or floating rates; others were highly complex and uniquely tailored to the interests of specific investors. LBIE, with the assistance of Lehman Brothers Limited (“LBL”), acted as the arranger, dealer, and calculation agent with respect to the EMTN Program and Non-EMTN Programs.

Section II of this memorandum sets forth the accounting treatment that Lehman applied to the LBT Issued Notes prior to the commencement of LBHI’s chapter 11 case on September 15, 2008 (the “Petition Date”). Section III of this memorandum sets forth the principles and methodologies LBHI will utilize to value the LBT Issued Notes for the purposes of evaluating claims in its chapter 11 case.

In connection with evaluating the claims filed against LBHI based on LBT Issued Notes, LBHI reviewed approximately 3,800 note issuances. Based on the terms and characteristics of each of the notes, LBHI separated the notes into the three categories described below.

2

The balance sheet of LBT, as recorded on LBHI’s consolidating books and records, as of end of the day on September 14, 2008 provides the following in relation to the issuance of LBT Issued Notes:

LBT Issued Notes Related Balance Sheet Information, as of the end of the day on September 14, 2008

(in millions)

LBT’s note issuance related balance sheet had three main components that were also components of Lehman’s previously audited financials.

To the extent that a liability is subject to fair value measurement, SFAS 157 clarifies that a fair value measurement of a liability shall reflect the non-performance risk relating to that liability. The reporting entity shall consider the effect of its credit risk on the fair value of the liability in all periods in which the liability is measured at fair value.

3

FMV Notes are compound instruments which can economically be viewed as having two components which require separate valuation: 1) a Vanilla Bond² and 2) an embedded derivative (the “Two Components”). The Two Components when added together equal the cash flows of the combined FMV Note.

In determining the mark to market value of credit spread changes (i.e., changes in non-performance risk) on FMV Notes, LBHI has chosen to quantify the impact of credit spread changes (consistent with the approach to valuation of the compound instrument) as the summation of credit spread impacts associated with the valuation of each of the Two Components.

The application of the credit spread to the notes is consistent with the methodologies utilized by LBHI prior to the Petition Date. Attached hereto as Annex I is an internal Lehman Brothers memorandum, dated November 2007, describing the procedures for applying the credit spread to the valuation of structured notes.

4

The following principles and methodologies will be utilized by LBHI to determine the allowed claim amount for each of the LBT Issued Notes.

5

For certain notes, the value recorded on the balance sheet does not represent the allowable claim amount. The allowable claim amount includes two types of adjustments.

Based upon the above valuation principles and methodologies, the estimated maximum allowable claims for each category of LBT Issued Notes have been calculated in the table on the following page.

6

LBT Estimated Maximum Allowable Claims Summary³

1. The Fair Market Value of LBT Issued Notes is the value recorded on LBHI's consolidating books and records at the end of the day on September 14, 2008.

2. The Addbacks/Accretion reflect the result of using 1) the yield at issuance for Zero Coupon Notes, and 2) par for interest bearing notes, in determining the Estimated Maximum Allowable Claim amounts.

3. The Estimated Maximum Allowable Claim amount by ISIN is floored at $0, therefore the sum of D plus E may be less than or equal to F.

4. For Zero Coupon Notes the Estimated Maximum Allowable Claim amount is limited to the end of the day on September 14, 2008 value at issuance yield excluding any CVA. The addback is:

5. The classification of To Be Determined refers to those issuances for which there is insufficient data in order to properly review and categorize.

Annex I

Reprint of November, 2007 LB Treasury Memo

Memo to Files: Structured Notes Credit Spread MTM

SFAS 157 Background:

SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 states, the objective of a fair value measurement is to determine the price that would be received to sell the asset or paid to transfer the liability at the measurement date (an exit price).

To the extent that a liability is subject to fair value measurement, SFAS 157 clarifies that a fair value measurement of a liability shall reflect the nonperformance risk relating to that liability. Nonperformance risk includes but may not be limited to the reporting entity’s own credit risk (eg. derivative liabilities may also consider counterparty nonperformance risk). The reporting entity shall consider the effect of its credit risk (credit standing) on the fair value of the liability in all periods in which the liability is measured at fair value.

LB Structured Note MTM Policy:

Structured notes are compound instruments which can economically be viewed as having two components to valuation 1) Vanilla Bond and 2) Embedded Derivative. While there may be multiple ways in which a compound instrument can be bifurcated into these two components (i.e. vanilla fixed bond + purchased option or vanilla floating bond + derivative swap), what is constant is that the two components when added together must always equal the cash flows of the combined structured note instrument.

In determining the mark-to-market value of credit spread changes (i.e. changes in nonperformance risk) on structured notes we have chosen to quantify the impact of credit spread changes consistent with our approach to valuation of the compound instrument as the summation of credit spread impacts associated with the valuation of the two components 1) Vanilla Bond and 2) Embedded Derivative.

Our approach to bifurcation of these two components is to bifurcate a Vanilla Bond at a floating rate and an Embedded Derivative Swap.

The change in fair value due to credit spreads is measured as the difference in net present value due to discounting remaining vanilla bond flows at libor + secondary spread vs. discounting at libor + issuance spread.

As structured notes generally do not pay current interest, or only nominal interest, the cash flow of the embedded derivative is principally expected to be paid at maturity. To arrive at the expected cash flow at maturity, the NPV of the Embedded Derivative as of the reporting date is utilizing to project a future value at maturity utilizing a flat libor yield to maturity calculation. Note: a flat libor curve is the same curve that is utilized in calculating the NPV of the Embedded derivative prior to quantification of credit risk.

The change in fair value due to credit spreads of the embedded derivative is measured as the difference in net present value of 1) the expected cash flow at maturity discounted at libor + secondary spread curve and 2) the fair value of the derivative calculated at a libor flat curve.

The credit risk MTV adjustment for structured notes is calculated as the summation of the credit spread adjustments for each of the two components.

Certain structured notes have embedded optionality that provides for the potential early repayment of the notes prior to contractual maturity data. Our policy is to update the expected life for transactions with embedded optionality on a quarterly basis (one month prior to quarter end period). For further discussion on how expected lives are determined see Separate Policy Document on Expected Life.

We considered several alternative credit curves to measure LB credit risk as of the reporting date. Included below is a summary of the alternative curves considers and our conclusion reached in arriving at utilizing the LB Par Spread Curve (adjusted for>10yrs).

Alternative Curves Considered:

Disclaimers

This Memorandum is provided for informational purposes only. LBHI is not bound by the information and statements set forth in this Memorandum and reserves the right to modify this Memorandum and the information regarding each LBT Issued Note included on www.lehman-docket.com in all respects at any time in the future. Nothing contained in this Memorandum is to be construed as an admission of liability by LBHI with respect to any LBT Issued Note or claim filed against LBHI based thereon. LBHI reserves the right to object to any claims filed against it based on the LBT Issued Notes on any and all grounds.

For the avoidance of doubt, nothing herein shall be construed to (i) characterize the LBT Issued Notes (or any other structured notes issued by LBHI and its affiliates) as “securities contracts” or “swap agreements” under the Bankruptcy Code, (ii) modify or pertain to the terms of any over-the-counter derivatives or similar contract between LBHI or any of its affiliates and any other person; or (iii) limit or otherwise modify the application of Section 562 of the Bankruptcy Code to such over-the-counter derivatives or similar contracts.

Nothing in this Memorandum is to be construed as an extension of any deadline established by the Bar Date Order.

The methodologies described in this Memorandum are strictly for the purpose of determining the amount of allowed claims based on valid and timely filed proofs of claim and nothing contained in this Memorandum shall be construed as inconsistent with, or contradictory to, any prior disclosure pursuant to the LBT Issued Notes offering materials or otherwise.

LBHI’s obligations to the noteholders with respect to the LBT Issued Notes, if any, are solely as guarantor.