The pro forma debt/Ebitda ratio of about 8 times given for the company formed by the merger of Callaway Golf with Topgolf has led Standard & Poor’s to downgrade the credit rating of Callaway to B from B+, and the agency indicated that it could lower it further. As Callaway plans to use much of its own cash flow to expand Topgolf’s network of golf venues, Moody’s sees the group’s higher financial risk offsetting benefits such as increased scale, greater breath of products and services, and potential profit growth. The leverage could improve to 6x when all Topgolf venues are open again, but S&P is worried that it is unlikely to start generating cash before 2024. At the same time, S&P has upgraded Topgolf’s post-merger rating to B- from CCC+, although Callaway is not guaranteeing Topgolf’s debt of $500 million or its $1 billion lease obligations.