Study On Default Of "17 Yongtai Energy CP004" Bond

There has been a problem of "rigid payment" in China's bond market until 2014.The so-called "rigid payment" means that the issuer promises to the investor that the bond will be guaranteed principal and interest.When the bond matures,if income does not meet the agreed standard or the loss occurs,then the platform institution will make up for the investment to the investor to ensure that the bond can be paid on time.Until 2014,with the default of our country's first bond "11-day bond",the situation of "rigid payment" has been broken,and since then,the default of bonds in our country has been happening continuously.Bond default is the inevitable result of the development of bond market,and the coexistence of risk and return is the objective law of economic development.However,the risk of bond default in China has been rising.Since the first bond default occurred,246 bonds have defaulted in China's bond market by the end of 2018,and 124 bonds have defaulted in 2018 alone,which has exceeded the total number of defaults in the past.This shows that the phenomenon of bond default in China has begun to intensify,the relevant departments urgently need to take relevant measures to reduce market risk and ensure the stable operation of the bond market.Since the first bond default occurred in China in 2014,the research time of bond default is relatively short,and the summary of bond default law is still in the initial stage.Therefore,through the continuous study of bond default cases,in order to improve the theoretical study of bond default,finding out the causes and consequences of bond default is of great significance for China to improve the market supervision system,strengthen the handling of irregularities in the bond market,ensure the stable operation of the bond market and protect the interests of investors.This paper takes the "17 Yongtai Energy CP004" bond default as a typical case of bond default,and makes a thorough analysis of Yongtai energy bond default from five perspectives: macro environment,industrial environment,business operation,financing environment and financial situation.Finally,the reasons leading to Yongtai energy ultimate default are concluded as follows: 1.Under the background of the coal industry depression,the company tries to walk through it.Diversified management is the way to reverse the predicament faced by enterprises.However,through massive financing and uncontrolled large-scale mergers and acquisitions,the enterprises' liabilities increase rapidly,the heavy burden of interest erodes earnings seriously,and causes the deterioration of Yongtai's energy financial status.2.Under the background of "deleveraging",the financing capacity of enterprises declines seriously,and Yongtai's energy resources.The vast majority of high-quality assets and equity have been mortgaged and pledged,and there is not much credit left by banks,which makes it difficult for enterprises to get funds from outside,and ultimately makes the fund operation mode of Yongtai Energy "borrowing new debt for old debt" unsustainable.Finally,this paper puts forward relevant suggestions from the point of view of rating,supervision and company for the reasons of Yongtai Energy's final default,which can provide some reference for improving the credit system of China's bond market and promote the healthy and orderly development of China's bond market.