An Analysis Of The Causes Of Bond Default Of Private Enterprises

Since the first substantial default occurred in China’s bonds in March 2014,default events have frequently occurred in China’s bond market,showing an intensifying trend.Especially after entering 2018,China has set off a new wave of bond defaults,and 2019 continues the trend of high growth in 2018.The default rate of private enterprises still occupies a relatively high proportion of various defaulters,and the risk of default Higher.As of the end of 2019,the scale of bond defaults reached 118.564 billion yuan,of which 39 new defaulting entities were added,and the number of private enterprises reached 32.Under this background,the first part of this paper analyzes the current situation of default in China’s bond market and finds that the number of private company defaults and the amount of defaults rank first among various enterprises,and private enterprises have become the main force of the bond default group.Secondly,a detailed analysis of private enterprises from the number of defaults and development trends,industry distribution,bond types,etc.,further confirmed that the default risk of private enterprise bonds is rising,through these analyses,for the following analysis of Jinggong Group The case analysis laid a solid foundation.The second part of this article selects the new entity Jinggong Group,which has a bond default in 2019,as a case for analysis.It reviews the default case of the Jinggong Group from the perspective of the default entity introduction,bond issuance,bond default history,and subsequent processing.The third part of this paper analyzes the case of Jinggong Group’s bond default,and analyzes the causes of its debt default from the perspective of macro industry,regulatory agency,rating agency and internal company perspective.In the analysis process,this paper will also use the comparative analysis method to compare the financial data of Jinggong Group with the other six companies with similar performance structures in the steel structure industry,so as to further find out why private companies are more likely to default on bonds.Finally,based on the previous experience and lessons learned from the case of Jinggong Group ’s bond defaults,it proposes policy recommendations from the following social sectors,such as: creditor pedestrians,third-party intermediaries,market investors,and regulators.Through the coordination and cooperation of various ministries of society,the stability of the private enterprise bond market can be promoted.Private enterprises can achieve better business development,thereby promoting the stability of China’s financial market and preventing the occurrence of financial risks.