Lehman Brothers on Monday said it would sell at least $3bn worth of convertible preferred shares to help bolster its balance sheet and dispel rumours that it could face capital problems similar to those that sank Bear Stearns.

Lehman, which has said for weeks that its capital position was strong, is selling the shares to big US institutions that are already holders of its stock. The bank is not raising money from sovereign wealth funds, as some other US banks such as Merrill Lynch and Citigroup have done during the credit crunch.