LANKA RATING ASSIGNS


Preliminary Instrument Rating of

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Softlogic Stockbrokers (Pvt.) Limited - Asset Backed Rated Commercial Paper - LKR ~500 mln

10-Feb-26

01

Applicable Criteria

Methodology | Stockbroker Entity Rating | Jul-24

Methodology | Debt Instrument Rating | Aug-24

02

Related Research

Sector Study | Brokerage & Securities | Apr-25


03

Analyst

Imran Iqbal | imran@lra.com.lk
+94 114 500099 | www.lra.com.lk

PRESS
RELEASE

DISCLAIMER

This press release is being transmitted for the sole purpose of dissemination through print/electronic media. The press release may be used in full or in part without changing the meaning or context thereof with due credit to LRA

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Rating Type Debt Instrument
Current
(10-Feb-26)
Action Preliminary
Rating BBB
Outlook Stable
Rating Watch -


The Softlogic Stockbrokers (Pvt.) Limited ("SSB" or "the Company"), a licensed stockbroker and a member of the Colombo Stock Exchange (“CSE”), intends to issue LKR~500 mln Commercial Papers ("CPs" or the "debt instrument"). Lanka Rating has assigned a preliminary rating to the proposed CPs issuance. The final rating will be assigned after the review of signed documents like Trust Deed and Term Sheet. The higher assigned rating (three notches higher than the entity rating) reflects the presence of structured credit protection mechanisms for the CPs. The structure comprises securitization of CPs against the Company's pool of receivables from its debtors (stock brokering clients) as collateral while maintaining a Loan to Value (“LTV”) ratio of ~70%. A minimum collateral coverage of ~130% should be maintained at all times, giving ample cushion against potential credit and market risks. The investors of CP will have exclusive charge of eligible on the pool of receivables through trustee structure. The Trustee will liquidate the underlying stocks and make the proceeds available for the receivables pool in case of non-payment by the debtors. The rating also draws comfort from ring-fencing of the CPs' proceeds and their utilization in financing only top 40 eligible scripts/counters in terms of highest daily market turnover in Colombo Stock Exchange ("CSE"). The implementation of security structure will be assessed by a pre-issuance audit by an independent auditor. The auditor will verify the existence and eligibility of pledged receivables and collateral assets and other covenants. This will be followed by quarterly independent audits to ensure ongoing compliance and adherence to the security structure. The Company will maintain a sinking fund equivalent to ~50% of the quarterly coupon obligation while maintaining ~10% of the CP issue value in TBills or repurchase agreements, ensuring adequate short-term liquidity. The rating also considers SSB’s compliance with regulatory capital adequacy and liquidity requirements. In case of any short-fall in the receivables pool at the time of maturity of CPs, the Company will fulfill the gap as the investors of CP will have recourse to the Company as well.

The assigned rating will remains contingent on the compliance of established covenants throughout the tenor of the debt instrument. Similarly, any change in the entity rating will have implications to the assigned rating.
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About the Entity

Softlogic Stockbrokers (Private) Limited (“SSB” or “the Company”) was incorporated in Sri Lanka in 2010 and is licensed by the Securities and Exchange Commission (“SEC”) of Sri Lanka as a stockbroker and a member of the Colombo Stock Exchange (“CSE”). SSB provides equity and debt trading, research-based investment advisory, and online trading services to over 7,000 local and foreign retail and institutional clients. The Company’s shareholding is concentrated, with ~80.1% held by Softlogic Capital PLC (“SCAP”) and ~19.9% by Seishin Limited, a company based in Japan.


About the Instrument

SSB intends to issue asset backed, rated Commercial Papers of LKR ~500 mln for eligible investors at a par value of LKR ~100. The Commercial Papers are secured against the Company's pool of receivables from its debtors as collateral while maintaining a Loan to Value (“LTV”) ratio of ~70.0%. The CPs will be securitized against these receivables. The tenor of the Commercial Papers can range from 3 months to 12 months, with an expected rate of T/Bill + ~4.0%. The Commercial Papers will be redeemed with the interest and capital as a bullet payment at the time of maturity.

Lanka Rating Agency Limited

No. 145,
Kynsey Road, Colombo 00800, Sri Lanka

Tel: +94 11 450 0099

Web: http://lra.com.lk

E-mail: info@lra.com.lk