CORRECTED - Lehman credit spreads widen amid KDB speculation

(Corrects headline and first paragraph to show spreads rose, not fell)

NEW YORK, Sept 5 (Reuters) - The cost to insure debt of Lehman Brothers LEH.N rose on Friday amid talks between state-controlled Korea Development Bank [KDB.UL] and the U.S. investment bank for a possible acquisition.

KDB has declined to give any details of negotiations and other Korean banks touted as being part of a consortium have denied interest. For details see [ID:nSP115462].

Lehman's credit default swaps rose 20 basis points to 345 basis points, or $345,000 per year for five years to insure $10 million in debt, from 325 basis points on Thursday, according to Phoenix Partners Group. (Reporting by Walden Siew; Editing by Tom Hals)