Research On The Causes And Financial Early Warning Of Private Enterprise Bond Default

As one of the important ways for enterprises to directly finance,bonds have the advantages of large financing scale,long debt repayment period and low financing cost.Based on this,more and more companies choose to issue bonds to meet their financing needs,which greatly promotes the rapid development of China's bond market.In recent years,the credit risk of China's bond market has intensified,and bond defaults have intensified,and there is a tendency to spread and concentrate on private enterprises.By the end of 2018,a total of 110 private enterprises in China had issued 231 bonds with substantial defaults,and the total amount of default was as high as 117.327 billion yuan.How to effectively identify,warn and prevent the bond default risk of private enterprises has become an urgent problem to be solved.In this context,this paper firstly analyzes the status quo of default in China's private enterprise bond market,and studies the main factors affecting the default of private enterprise bonds from the financial level and non-financial level.Taking private enterprises as a sample,we select financial early warning indicators that are sensitive to the risk of bond default risk.Prepare the framework for subsequent case studies.Secondly,taking Wintime Energy as an example,it analyzes the causes of bond defaults from three levels: macro,industry and company.Taking "13 Wintime Debt" as an example,it analyzes the risk identification ability of investors and the effectiveness of the early warning function of China's credit rating mechanism.Finally,the financial early warning mechanism and risk identification framework for private enterprise bonds are constructed.At the same time,some suggestions are proposed for China's regulatory authorities,credit rating mechanisms,bond issuing companies and market investors.The research findings in this paper: First,from a non-financial point of view,private companies have bond defaults,which are directly affected by external environmental factors such as macro and industry.Unreasonable strategic planning at the enterprise level and internal governance confusion are also important factors leading to bond default..Second,from a financial point of view,the cash ratio,the interest multiplier,the accounts receivable turnover rate,the profitability related indicators,and the comprehensive financial indicator Z value have a strong early warning ability against the default risk of private enterprise bonds.Third,the risk identification ability of Chinese market investors is limited,and the early warning effect of the credit rating mechanism also has a lag.Therefore,it is necessary to combine the above various factors to establish a financial early warning mechanism and risk identification framework for private enterprise bonds,which is of great significance to alleviate and improve the default of private enterprise bonds in China.