Research On The Case Of Bond Default Of Liyuan Precision Company

Since China’s economy entered the new normal,uncertainties in the economic environment have continued to increase.From the perspective of external environment,the trade disputes provoked by the us government,the increasing frequency of interest rate hikes by central Banks around the world,the "trump prosperity" is no longer what it used to be,and the geopolitical conflicts in the world are incessant.From the perspective of internal environment,the pressure of the country’s rapid economic growth has increased,the deleveraging policy has been firmly implemented,coronavirus raging,and the domestic capital market,especially the stock market,will continue to be depressed in 2019.The change of internal and external economic environment influences the progress of individual enterprises.The country defaulted on its bonds under such external and internal circumstances,Usher in a new wave of high tide.In 2018,both the number of defaulted bonds and the scale of default are at a historical high.On September 25,2018,Jilin Liyuan Precision Manufacturing Co.Therefore,this paper selects liyuan refined corporate bond default as the research object,studies the default process and causes of "14 liyuan bonds" by using case analysis method,and draws inspiration from this,including non-ferrous metal processing industry of each industry participants.Firstly,this paper takes the default of liyuan refined corporate bonds as an example,sorts out the whole process of the default event of liyuan refined bonds and the corresponding subsequent disposal.Secondly,this paper analyzes the causes of liyuan refined bonds’ default from three aspects :macroeconomic environment,industry development and internal company.The external economic environment for li yuan refined bonds to default includes the change of world macroeconomic environment,the change of internal industry environment brought by domestic supply-side structural reform,and the narrowing of financing channels.From the perspective of the non-ferrous metal processing industry,the non-ferrous metal processing industry profits and development model gradually solidified,the enterprise financial situation than a few years ago increasingly severe,making liyuan refining company difficult to stay out of trouble.Liyuan refining company itself has many problems in enterprise strategy,financial environment,external financing channels,profit model,information disclosure and other aspects,and these internal factors are also one of the important reasons for company default.Through the aboveanalysis,this paper concludes that the default of liyuan refined bonds is the result of the joint action of multiple levels.The external economic environment and policy environment lead to the increase of enterprise costs,financing difficulties,channel narrowing,and the development limitations of non-ferrous metal processing industry.But investigate its fundamental,still lie in enterprise interior management existence serious problem.Finally,this article from the enterprise,supervision,investors three aspects to extract the summary inspiration.The policy of reducing leverage needs to consider the financing reality of private enterprises,and should implement the principle of differentiation,so as to reduce the risk of bond default in the industry and alleviate the financing difficulties of enterprises.As a bond issuer,the company should avoid aggressive investment and maintain a good financial environment and corporate governance environment.While giving play to the role of the market in dealing with bond defaults,regulators should also improve the bond supervision system and establish a good regulatory environment.Bond investors need to raise their risk awareness and avoid blind investment.