Lehman says worst of credit correction is over

NEW YORK (Reuters) - Lehman Brothers Holdings Inc LEH.N executives said on Tuesday the worst of the credit correction is over, barring any unforeseen circumstances.

The U.S. investment bank, which reported a third-quarter profit that beat expectations, also said issues in the asset-backed commercial paper market still need to be resolved.

Lehman executives made their comments during a conference call with analysts.

Lehman said its liquidity position is stronger than ever as it faces only a small amount of debt maturing in the near term. The company also faces little refinancing pressure.

Lehman, which shut down subprime lending operations, said it ended the third quarter with $1.6 billion in junk-rated interest in residential mortgage securitizations. Of that amount, $230 million was related to risky subprime loans.

Amid market volatility, Lehman's valuations on leveraged loans took more than $1 billion in hits during the quarter.

(Reporting by Tim McLaughlin)