S&P ups, rates Callaway Golf loan B+

S&P said it rated Callaway Golf Co.’s planned $950 million senior secured first-lien term loan due in 2029 B+ with a 3 recovery rating. Concurrently, the agency raised Callaway’s issuer rating to B+ from B.

Callaway plans to use the loan to refinance Callaway and subsidiary Topgolf International Inc.'s term loans, put cash on the balance sheet and pay fees and expenses.

“The rating upgrade primarily reflects Topgolf's continued strong performance, our expectation for sustained margin improvement, and near-term positive free cash flow generation. Topgolf's EBITDA exceeded our most recent forecast by more than $20 million in the fourth quarter of 2021, driven by strong walk-in traffic, continued demand for social events and better-than-expected corporate event bookings,” S&P said in a press release.

The agency said it plans to withdraw Topgolf’s ratings once the transaction is completed and the debt is repaid.

The outlook is stable.

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