Lehman Borrowed $18 Billion From Previously Secret Fed Program

Lehman Brothers Holdings Inc.’s brokerage borrowed as much as $18 billion in four separate loans from a previously secret program of the U.S. Federal Reserve in June 2008, three months before its parent filed the biggest bankruptcy in U.S. history.

The program, which peaked at $80 billion in loans outstanding, was known as the Fed’s single-tranche open-market operations, or ST OMO. It made 28-day loans to units of 19 banks from March 7, 2008, to Dec. 30, 2008. Bloomberg reported on ST OMO in May, after the Fed released incomplete records on the program. In response to a subsequent Freedom of Information Act request for details, the central bank disclosed borrower names, amounts borrowed and interest rates.