Lehman failure prevents Y288.5 bln JGB issuance

TOKYO, Sept 22 (Reuters) - Japan's Finance Ministry is unable to issue a further 288.5 billion yen ($2.7 billion) in government bonds, because Lehman Brothers (LEHMQ.PK) failed to pay for them after buying them at recent auctions, a ministry official said on Monday.

That brings the total amount of JGBs that Japan's finance ministry has been unable to issue because of Lehman's failure to pay for them to 417.2 billion yen ($3.9 billion).

At this point, the ministry was not planning to issue extra JGBs to the market to fill the gap, the ministry official told Reuters.

The ministry did not receive payment for 158.1 billion yen in 10-year Japanese government bonds and 130.4 billion yen in five-year JGBs that Lehman Brothers successfully bid for at recent bond auctions, the official said. Payment for the bonds was due on Monday.

Lehman Brothers, which collapsed last week after being roiled by the global credit crisis, had earlier failed to pay for 128.7 billion yen in two-year Japanese government bonds and financing bills that it had successfully bid for at finance ministry auctions.

Lehman Brothers filed for bankruptcy protection last week, becoming the highest-profile casualty of the global credit crisis. Its Japan unit filed for court protection last Tuesday with an estimated 3 trillion yen in debt. [ID:nN13574113] ($1=107.42 Yen) (Reporting by Masayuki Kitano; Editing by Rodney Joyce)