Case Study Of Sichuan Coal Group Bond Default

China’s bonds have been issued since the 1980 s.The bond market has developed rapidly in recent years.In recent years,China’s bond defaults have begun to appear,and the risk of bond defaults is worthy of attention.As the largest state-owned coal enterprise in Sichuan Province,Sichuan Coal Group has suffered eight consecutive bond defaults after the first bond default in 2016.This shows that the issuer has not properly handled the bond default event and has not responded properly.Measures.In order to develop the bond market healthily,finding the cause of bond default events and finding reasonable measures to solve the bond credit risk has become an important task in studying bond default events.Taking the default event of the Chuanmei Group’s bonds as an example,this paper analyzes the default events of the Chuanmei Group bonds,finds the cause of bond defaults,and proposes rationalization measures to strengthen the risk management of bond defaults.This paper conducts a risk assessment of the Sichuan Coal Group’s default event.First,it uses the financial indicator analysis method to analyze the financial situation of the Sichuan Coal Group by calculating the financial indicators of the Sichuan Coal Group.Secondly,the Z-score model analysis method is used to compare the results with the financial indicators analysis to enhance the accuracy of the analysis results.The comparative analysis of the two methods shows that the Chuanmei Group has a higher default risk.Finally,through the KMV credit risk assessment model,the credit risk of the Sichuan Coal Group was analyzed,and compared with the rating results of the New Century Rating Company on the Sichuan Coal Group,it was found that the Sichuan Coal Group received better rating results relative to the financial situation of the year.This indicates that the rating agencies’ rating results are not objective,and it also reflects that the regulators have not effectively regulated the bond market.The article then analyzes from a macro level the cause of the poor production and operation of the Sichuan Coal Group is the macroeconomic downturn,overcapacity in the coal industry and industry-related policies are not conducive to the development of enterprises.From the enterprise level,it is analyzed that the high risk of default of the Sichuan Coal Group is that the capital structure of the enterprise is unreasonable and the management level is not high.From the credit level,the reasons for the unreasonable rating results of the Sichuan Coal Group are the low quality of the rating team,the rating system of the approval system,and the drawbacks of the rating payment method.From the regulatory level,it is analyzed that the cause of bond default is imperfect supervision mechanism,the supervision department’s guarantee for state-owned bonds,and the rating market access and exit mechanism are not perfect.In order to strengthen the risk management of bond default,this paper puts forward how the enterprise can deal with the macro environment and policy changes.It is recommended that enterprises should establish a reasonable capital and capital structure,improve the financial early warning mechanism,improve the management level of the enterprise,and how to improve the credit rating.Advice on the accuracy and supervision of the bond market.This paper provides a reference method for the study of bond default in the future,and provides a reference for strengthening the management of bond default.