S&P rates SanDisk notes BB-

Standard & Poor's said it assigned a BB- senior unsecured rating to SanDisk Corp.'s proposed $1 billion in senior convertible notes. The recovery rating is 4, indicating 30% to 50% recovery in a default.

The proceeds will be used to retire existing debt at maturity and for other general corporate purposes.

The rating reflects an expectation that earnings and cash flow will continue to fluctuate sharply over a cycle, S&P said.

Currently, the company is in a strong cyclical upswing, generating credit measures that are stronger than those consistent with an "aggressive" financial profile, the agency said.

Still, the rating incorporates a tolerance for sharp industry downturns, elevated leverage and negative cash flow, S&P said.

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