Research On The Causes Of Default Of Shenwu Environmental Bonds

In recent years,the bond market of our country is in the stage of rapid growth.Both the number of issuance and the scale of issuance are continuously expanding.However,while the bond market is gradually expanding,the credit risk is also gradually increasing.With the emergence of China's first bond default event in 2014,the number of bond defaults has increased gradually.In 2016,the amount of bond defaults reached 32.09 billion yuan.After a short period of backwardness in 2017,the peak of bond defaults has come in 2018,reaching 71.461 billion yuan in the first three quarters alone,with an astonishing amount.Why do bond defaults occur frequently?This is a question worth pondering.Shenwu Environmental Protection is one of the private listed companies that defaulted on bonds this year.When the "16 environmental bonds" were sold,the operation of Shenwu environmental protection was not a problem.In less than two years,Shenwu environmental protection faced a very tight cash flow situation.Therefore,Shenwu environmental protection bond default incident is a case worthy of study.Starting from the case of Shenwu environmental bond default,this paper combines the financial statements data of enterprises from 2014 to 2017 to study the reasons for default.Firstly,the process of Shenwu environmental bond default is reviewed.Then,the causes of Shenwu environmental bond default are analyzed from the industry level,company operation level and corporate governance level.Finally,based on financial indicators,Shenwu environmental protection bond default is diagnosed by centralized model.This paper finds that there are multiple factors leading to the default of Shenwu environmental bonds.In addition to the impact of the decline in profitability of downstream energy-intensive enterprises,Shenwu environmental protection develops too fast,accounts receivable is difficult to recover,and the support of major shareholders is insufficient.After finding out the problems,this paper puts forward some suggestions to Shenwu Environmental Protection and related enterprises.It considers that the industry should quantify the industry indicators to promote the transformation and upgrading of the industry;enterprises should optimize the capital structure and establish the risk management system of accounts receivable;and in corporate governance,they should optimize the ownership structure and improve the transparency of the disclosure of equity pledge information.It is hoped that these suggestions can help relevant enterprises and promote the sound development of China's bond market.