Case Research On Bond Default Of Chengdu Techcent Environment Co.,Ltd.

Since 2014,China's bond market has broken the rigid payment system,and the liquidity of corporate bonds has continued to deteriorate,resulting in a high incidence of defaults.In 2018,the financial deleveraging policy triggered a credit contraction,with the number of new defaulting issuers,the number of defaulted bonds and the amount of defaults more than doubling from the peak in 2016.Since 2019,although the tightening of external financing has improved,market risk appetite has increased slowly,the frequency of defaults has not slowed down and the number of defaults has increased rapidly.Up to now,a total of 41 new issuers have substantially defaulted,and 164 bonds have been issued for the first time.The total amount of defaulted bonds has reached 150.6 billion yuan,exceeding the amount and amount of defaulted bonds in 2018.With the developing of China's economy from emphasis on growth to emphasis on developing quality,the environmental protection industry has been developing rapidly.The environmental protection industry mainly adopts BOT/PPP and other investment and operation modes,showing the characteristics of capital intensive.Techcent environment,a service company engaged in energy conservation and environmental protection,has defaulted on about 3510.41 million yuan of debts since it fell into debt difficulties in 2018,accounting for 2,662.70% of Techcent environment's audited net assets in the latest period.Due to the company's tight liquidity,the company fails to honor the principal and interest of “16 Techcent 01” as scheduled,which constitutes a substantially default.This article selects Chengdu Techcent Environment Co.,Ltd.as the research object,in the economic downward pressure and under the complicated social environment,combined with their own stage of development and problems,to explore causes and influence factors of the private enterprises bond defaults,and for including issuers,investors and regulators,puts forward related implication of different parts,provide direction for the reform and development of the bond market.This paper is divided into five parts: the introduction part introduces the research background,research significance,and literature review of this paper,which provides the theoretical basis and support for this paper.The second chapter introduces the default case of Techcent Environment bond to provide a systematic review for the research work.The third chapter is the key analysis chapter of this paper,which analyzes the causes of environmental bond default of Techcent Environment,and explores from the macro environment,the industrial environment and the issuing body,and finally concludes the main causes of environmental default of Techcent Environment.The unreasonable corporate debt structure leads to the weak debt paying ability,and the imperfect corporate governance is the direct cause of Techcent Environment bond default.The inherent limitations of the business model make Techcent Environment into a vicious circle of capital turnover difficulty and overdue debt.At the same time,changes in the macro environment and industrial environment will also have an impact on the repayment of corporate bonds.Under the downward pressure of the economy,the financing environment of private enterprises is difficult,and the bond market declines comprehensively.In addition,the regulatory environment is also one of the external causes of corporate bond default.In this paper,combining with the non-public bond issuance system,the characteristics of privately raised bonds in China are compared,and the loopholes in China's regulatory mechanism are discussed.The fourth chapter puts forward some inspirations for bond issuers,investors and regulatory authorities,and provides some reference for improving the bond market system.Firstly,bond issuing enterprises should actively comply with the macro environment and the changing trend of the industry,establish the financial warning mechanism,and continuously improve the level of enterprise management.Secondly,as a bond investor,we should improve our risk identification ability and risk tracking awareness,actively communicate with the debtor,and timely take legal weapons to protect our legitimate rights and interests.Finally,the regulatory authorities should strictly control the issuance approval process,gradually improve the shortcomings of the supervision of the bond market,promote the construction of a default disposal mechanism,improve the risk diversification and transfer mechanism,regulate the development of the bond market from the system,and establish and maintain the bond market credit system.The fifth part is the conclusion of this paper,which summarizes the research results and puts forward the prospect of the development and reform of China's bond market.Hope that through this case study,we can find out the current macro-economic development under the bond market law of development,clarify the basic rule of bond defaults permanent basis,to protect the basic rights and interests of bond investors,at the same time for issuers and regulators to provide unique perspective of observation,improve the small and medium-sized enterprise financing environment and promote the benign development of China's bond market.