A Case Study On Credit Bond Default Of Huasheng Jiangquan Group

China's bond market has been in a rigid redemption state until 2014.However,since2014,credit bonds,which are an important part of the bond market,have become the mainstay of defaults,and the scale of defaults has been expanding,and the default rate has also reached a new high.In the structure of default,there are risks of resale clauses,private enterprises and overcapacity industries are characterized by high defaults.Nowadays,China is in a critical period of economic growth and shifting.The supply-side structural reform has put forward new requirements for the development direction of enterprises.How to prevent the credit risk of the credit bond market is an important issue that we urgently need to solve.Huasheng Jiangquan Group is the first private steel enterprise in China to default on credit bond repurchase,with its typical characteristics of overcapacity industries and private enterprises.In addition,the type of default of the sale due to its default event and the different redemption results of the two credit bonds of the company have great research value.Based on the case of Huasheng Jiangquan Group's credit bond default,this paper studies the causes of credit bond default by using case analysis method,literature research method and empirical analysis method,and draws some enlightenment from avoiding credit bond default from the perspective of enterprise and supervision.In terms of structural arrangement,this paper firstly summarizes the research status of credit bond defaults at home and abroad,and introduces credit risk theory,information asymmetry theory and financial crisis warning theory,and also lists the scale of China's defaulted credit bonds.Structure.Secondly,this paper briefly introduces the basic situation of Huasheng Jiangquan Group and the default credit bond “12 Jiangquan Debt”,and comprehensively reviews and sorts out the credit bond default process.Thirdly,combined with the case of this article,it explains the causes of credit bond defaults mainly from the financial status of enterprises,the degree of early warning of credit risks and the regulatory environment faced by enterprises.Among them,at the level of corporate financial analysis,we explore the deeper issues of credit bond issuance details,credit bond redemption guarantee mechanism,and overcapacity in the industry.At the regulatory level,the issue of resale terms and credit rating agencies was also analyzed.Finally,from the perspective of enterprises and regulators,the paper draws on the three aspects of credit bond issuance planning,redemptionmanagement,development strategy selection and credit bond market supervision.This paper mainly draws the following conclusions: First,the financial factor is the direct cause of the breach of the Huasheng Jiangquan Group bonds.From a single financial indicator,the lack of business profitability,low operating efficiency,tight liquidity and high leverage have led to credit bond defaults.Second,the comprehensive financial indicator Z value reveals the deteriorating financial situation earlier.On the one hand,it shows that the lack of financial early warning mechanism further leads to the unsustainable credit bond redemption.On the other hand,the credit bond issuer can use Z.The value result establishes a credit risk early warning mechanism.When the Z value is less than the critical value,the redemption risk should be focused on.Third,behind the financial indicators,the lack of exposure to corporate debt planning,redemption management,and development strategy choices.Therefore,enterprises should carefully consider the details of credit bond issuance,establish a credit risk early warning mechanism,and actively get rid of the old kinetic energy and develop new kinetic energy,so as to prevent the outbreak of credit risk.Fourth,the lack of supervision by the regulatory authorities on the terms of the sale and the lack of supervision of the credit rating agencies have,to a certain extent,led to the accumulation of risks in the credit bond market.The regulatory authorities should strengthen supervision over the establishment and implementation of special terms represented by the terms of resale,and improve the standardization of credit rating agencies to prevent credit risk in the credit bond market.