S&P ups Topgolf

S&P said it upgraded Topgolf International Inc.’s rating to B- from CCC+ and removed the ratings from CreditWatch where it placed them with positive implications on Oct. 29.

The rating action follows Callaway Golf Co.’s acquisition of Topgolf, S&P said.

“The upgrade reflects our belief Topgolf is strategically important to the combined entity and that Callaway will likely support Topgolf under most foreseeable circumstances. Topgolf’s shareholders now own 48.7% of the combined entity and have three board seats; thus, they can exert significant influence on the combined entity. Callaway has also made it clear that Topgolf is an important part of the company’s strategy to create an unrivaled golf and entertainment business,” the agency said in a press release.

The outlook is negative, reflecting the risk that Callaway will not expand its EBITDA as quickly as anticipated, causing its cash funding needs to exceed S&P’s assumptions, which could pressure liquidity, the agency said.

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