On March 10th, Bloomberg reported that Lehman Brothers used "repo conduits" to make liquid otherwise illiquid assets and to create the appearance of financial health. Under the transactions, Lehman Brothers entered into repurchase agreements with a third party using commercial real estate loans as collateral. The third party then used the underlying collateral to issue notes that Lehman Brothers bought. Lehman Brothers then pledged those notes as collateral in other transactions. Repo Conduits.