The City University of New York, after its weekly interest rate payments almost doubled to nearly $1.1 million, is considering plans this week to refinance a large chunk of nearly $1 billion of its debt.

CUNY is the latest victim of the auction-rate securities market, an obscure part of the debt universe that is tapped by large institutions such as universities and hospitals, as well as municipalities, to help fund projects.

Auction-rate securities are a form of long-term debt in which the interest rates are reset every seven to 35 days, providing issuers with access to short-term liquidity. Until recently, the $331 billion market was considered a stable, nonrisky investment. During the past several weeks, however, the global credit crunch has sucked the liquidity out of this area of the borrowing market, with demand for these securities plummeting, sending interest rates to new highs and, in some cases, causing the auctions to fail. In fact, according to a report from JPMorgan Chase, auctions for these securities are failing at a pace of between $15 billion and $25 billion a day.

CUNY, which saw the interest rate costs on its $980.7 million in auction-rate securities jump nearly 63%, from $675,300, is the latest in a growing rank of issuers looking to restructure debt. Others include the New York City Municipal Water Finance Authority, the Battery Park City Authority, and the Port Authority of New York & New Jersey.

“We have begun to explore converting these high-interest auction rate bonds into other debt instruments that will provide cost savings for the state,” a spokesman for the New York State Division of the Budget, Matthew Anderson, said. The agency oversees the budget for CUNY, which is funded by the city and state.

“A lot of institutions in New York are taking a big hit from this,” the vice president of the money-management firm Cumberland Advisors, John Mousseau, said. “It just doesn’t make sense to pay these high rates for much longer, so more and more issuers are getting out.”

Already, the Port Authority is planning to redeem $200 million of its auction-rate debt two weeks after interest rates spiked to 20% from 4.3%. It expects “to be out of the auction-rate market business in six to eight weeks,” a spokesman for the Port Authority, Steven Coleman, said.

Another exit-bound issuer is New York City’s Municipal Water Finance Authority, which finances water-purification and wastewater collections projects for the city. Last week, the public authority announced plans to pay off part of its $1.02 billion in auction-rate debt by selling $684 million of variable-rate demand notes.

Even the city government has not been immune to the recent turmoil. This year, the city saw a portion of its $4 billion in auction-rate bonds fail to lure enough interest from investors to keep the interest rates from resetting at higher levels. Still, the impact may not be so severe: Its auction-rate obligations comprise only 5% of its overall $72 billion in debt, which is pooled into the capital improvement budget for projects like school construction and roadway repairs.

It could not be determined by press time whether the city planned to restructure any of its failed auction-rate debt.

Not every institution is reeling from higher-priced auction rate securities. Some institutions, such as Carnegie Hall, have more conservative structures that limit the amount by which interest rates can increase or decrease. In the case of the famed music hall, its borrowing costs increased only 0.3 percentage points, to 3.5%, after its seven-day auction failed recently. The organization, which took out $41.6 million in auction-rate debt to build Zankel Hall, said Friday it had no plans to refinance those bonds because the increase in its interest rate has been modest and, so far, manageable.

Still, even Carnegie Hall is watching the market with caution. “As the bond market is unsettled at this time, we are watching to see what alternatives develop,” a spokeswoman, Synneve Carlino, said.