UPDATE 1-Cablevision shares up after new debt offering

NEW YORK, Jan 8 (Reuters) - Shares in New York cable operator Cablevision Systems Corp (CVC.N) rose more than 15 percent on Thursday after it said one of its units is planning a $500 million note offering to pay down its due debt.

CSC Holdings Inc, a unit of Cablevision, said the $500 million offering of five-year senior notes would be made to certain institutional investors in a deal exempt from registration requirements.

The offer is led by J.P. Morgan, Banc of America Securities, Citi, Credit Suisse and Deutsche Bank.

Like many cable companies, Cablevision has a heavy debt load with around $11 billion of net debt and a market capitalization of around $5 billion.

Richard Greenfield, an analyst at Pali Capital, said he believes Cablevision plans to sell the notes with an interest rate of 8 percent to 9 percent, with a yield of 11.25 percent to 11.50 percent.

"We have heard from multiple sources that J.P. Morgan is oversubscribed on the offering, implying the coupon and discount could be at the lower end of expectations with the potential for the deal to be upsized from $500 million," he wrote on his blog.

Moody's Investors Service assigned a B1 rating to the proposed issuance while Standard & Poor's rated it BB.

Investors have been concerned that the frozen credit markets may make it difficult for companies laden with debt to meet their regular interest payments or raise new credit to pay down due debt.

"We see this as a positive catalyst because the Street had concerns about (Cablevision's) ability to pay off the $1.7 billion due, beginning in April 2009," said Collins Stewart analyst Thomas Eagan in a note to clients.