March 14 (Bloomberg) -- Lehman Brothers Holdings Inc. obtained a $2 billion credit line as the investment bank tried to blunt the stock's worst drop in almost eight years and assure investors the firm isn't short on cash.

The unsecured, three-year facility from 40 banks replaces an existing credit line, New York-based Lehman said today in a statement. JPMorgan Chase & Co. and Citigroup Inc., also based in New York, led the effort, the firm said.

Lehman announced the financing hours after Bear Stearns Cos. said it agreed to an emergency bailout by JPMorgan Chase and the New York Federal Reserve. Bear Stearns, which fell 47 percent in New York trading, said its cash position had ``significantly deteriorated'' in the past 24 hours, raising concern among investors that more financial firms may face a liquidity shortage.

``Nothing speaks like cash in a crisis, and they have the cash,'' said James Ellman, president of San Francisco-based Seacliff Capital LLC, which has about $150 million under management. ``In these financial markets, locking in three-year money is long-term. Usually we call it medium-term, but now that's very long-term.''

Lehman fell $6.73, or 15 percent, to $39.26 at 4:15 p.m. in New York Stock Exchange composite trading, the most since April 2000, leaving the stock down 40 percent this year.

``We are extremely pleased with the success of the syndicated facility and view this as a strong signal from the market and our key bank relationships,'' said Paolo Tonucci, Lehman's global treasurer, in the statement.

To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net

Last Updated: March 14, 2008 16:50 EDT