Study On Causes And Disposition Of Wintime Energy's Bond Default

As an important part of my country's capital market,the bond market has gradually evolved into one of the most important direct financing channels as the institutional system in the market continues to improve over the years.In recent years,under our country's economic downturn and the deepening of supply-side reforms,credit default events have occurred frequently,and the amount and scale of defaults have reached their maximum in 2018,which has had a great impact on the bond market.Therefore,how to effectively prevent the frequent occurrence of bond default events and how to effectively dispose of default bonds to resolve market risks are issues that we need to solve.On July 5,2018,Wintime Energy failed to redeem its issued "17 Wintime Energy CP004" principal and interest,which constituted a substantial default.The cross-default clause signed by this bond accelerated the maturity of the rest of the company's bonds and became the highest default amount in the same year.The private enterprise with the largest number of default bonds is also Chinese first default event with a rating of AA+ bonds.This article selects Wintime Energy as a case company,and firstly describes the research background and significance,research content and methods.Secondly,through reading a lot of literature and based on the theory of financial distress and bond default,Wintime Energy's business and operating conditions are introduced,and the whole process of default bond issuance to default is sorted out.Thirdly,in-depth analysis of the reasons for Wintime Energy's default from the macro-policy level,industry development status and internal decision-making governance of the company.Through research,it was found that the reasons for this bond default include the contract of social credit under the background of strict financial supervision,which leads to refinancing channels.The external factors such as the poor economy,the declining prosperity of the coal industry,and internal factors such as the unreasonable debt structure and weak development foundation of the company's blind expansion.Among them,the unsuccessful bond issuance leading to the breaking of the capital chain is the fuse of this default and the direct cause of the default.In the case of overcapacity in the industry and the sluggish market,the company's aggressive diversification expansion strategy has led to increasing debt financing needs.Large,eventually leading to deterioration in liquidity and the issuer's inability to pay due debts is the root cause of this default.Based on the analysis of the market environment and causes,Wintime Energy analyzes and summarizes the follow-up disposal methods and existing problems of default bonds.Although Wintime Energy uses government policy assistance,strategic restructuring,asset sales and other methods for bond default disposal,but Due to the nature of the enterprise and the uncertainty of the capital recovery cycle,the expected disposal effect has not been achieved.Finally,from the perspective of the prevention and disposal of bond defaults,relevant suggestions are made from the aspects of prevention of defaults by debtors,investors,regulatory and rating agencies,and default bond disposal mechanisms.This article aims to provide a certain reference for the enterprise to reduce the risk of bond default and the effective measures that can be taken in the follow-up of the default.It will provide some help to companies that explore the causes of corporate default and cannot effectively handle default bonds.,Regulatory agencies and investors pay attention to and prevent bond defaults.