Cablevision Sets Debt Offering, Tweaks Guidance

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Cablevision Systems Corp. said it plans to refinance some of its debt through a $2 billion bond offering later this week.

Cablevision will offer $1.5 billion in senior notes and its holding company, CSC Holdings Inc., will issue another $500 million in bonds.

In a prepared statement, Cablevision said the proceeds of the $1.5 billion bond offering would be used to purchase CSC Holdings shares. The proceeds from the CSC Holdings offering will be used to pay down bank debt. CSC will use the proceeds from selling its stock to Cablevision to redeem its senior subordinated notes.

In a research note, UBS Warburg LLC cable debt and equity analyst Aryeh Bourkoff estimated that the refinancing would save Cablevision about $57 million annually in interest payments.

Cablevision stock was up 33 cents each (1.5%) to $22.66 in 4 p.m. trading Monday

In a separate announcement, Cablevision reiterated its 2004 financial guidance but said its first-quarter results could be lower as a result of the recent arbitration decision concerning carriage of Yankees Entertainment & Sports Network,

Cablevision said adjusted-operating-cash-flow growth would be more heavily affected during the first quarter because the YES agreement will be retroactively applied without the benefit of rate increases.

As part of the settlement, Cablevision agreed to carry YES on its expanded-basic tier. The MSO has said that it will raise rates 95 cents per month as a result of the YES deal.

Cablevision is reportedly paying YES $1.85 per subscriber, per month for the service.

On March 2, Cablevision said it expected adjusted operating cash flow to rise between 13%-15% for the year, with revenue up 12%-14%.

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