UPDATE 2-CB Richard Ellis jumps on sale of shares, debt

* CB Richard Ellis to sell shares to Paulson

* Company to sell $400 million in notes

* Shares jump 13 percent (Update stock movement, adds Moody's rating, details on outlook)

By Ilaina Jonas

NEW YORK, June 10 (Reuters) - CB Richard Ellis Inc (CBG.N) stock rose 13 percent on Wednesday after the world's largest real estate services firm said it agreed to sell 13,440,860 shares to hedge fund Paulson & Co and expected to generate $100 million from the sale.

In addition, CB Richard Ellis issued quarterly guidance for the first time in several quarters in advance of marketing an offering of $400 million senior subordinated notes due 2017.

The Los Angeles-based company also plans to raise $50 million by selling shares from time to time to the public market.

The company intends to use the net proceeds from the direct placement and the public offering for general corporate purposes, which may include the repayment or repurchase of some of its debt. It plans to use the proceeds from the notes sale to repay or repurchase its debt.

For the second quarter, CB Richard Ellis expects earnings per share attributable to its shareholders, excluding one-time items, to be in the range of break-even to 7 cents a share. That's down from 16 cents per share a year earlier and could trail the 7 cents a share analysts on average have forecast, according to Reuters Estimates.

The forecast is based on the number of shares outstanding before issuance of stock to Paulson. At the end of the first quarter, the company had about 261 million shares outstanding.

The company said its outlook is "highly preliminary" given the uncertainty of the commercial real estate market and the nature of the leasing business which tends to be more active toward the end of the quarter.

Moody's Investors Service on Wednesday affirmed the senior debt rating of CB Richard Ellis at Ba2, two steps into junk, and assigned a lower Ba3 rating to the newly announced senior subordinated debt. It kept the rating outlook as negative because of the company's high leverage levels, as well as the protracted credit crisis and current economic conditions that have sharply reduced its income from building sales.

However, Moody's said the cash raised from the sale of stock to Paulson should mitigate the erosion of the company's debt covenant cushion.

CB Richard Ellis shares were up $1.06 at $9.20 and were among the top percentage gainers in early trading on the New York Stock Exchange. (Reporting by Ilaina Jonas, editing by Dave Zimmerman)