SanDisk plans to sell $1 billion seven-year convertibles to yield 0.75%-1.25%, up 30%-35%

By Rebecca Melvin

New York, Oct. 23 - SanDisk Corp. launched an offering of $1 billion of seven-year convertible senior notes that was seen pricing after the market close Wednesday and was talked to yield 0.75% to 1.25% with an initial conversion premium of 30% to 35%, according to a syndicate source.

Goldman Sachs & Co. is the bookrunner for the Rule 144A deal, which has a greenshoe for up to another $150 million of notes.

The notes are non-callable.

A portion of the proceeds is being used to fund the cost of the call spread, which increases the effective conversion price of the debt from the issuer's perspective.

Proceeds will also be used to repurchase shares of common stock from purchasers of the notes and for repayment of debt at maturity or repurchase from time to time. In addition, proceeds will be used for potential strategic investment or acquisitions and repurchase common stock under existing stock repurchase programs and for other general corporate purposes, including capital expenditures relating to manufacturing and technology.

SanDisk is a Sunnyvale, Calif.-based maker of flash storage cards used in consumer electronics.

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