A Study On The Causes And Countermeasures Of Bond Default Of Private Enterprises

In recent years,the emergence of de-capacity and de-leverage financial policies makes it difficult for private enterprises that used to rely on a large number of loans to adapt to the new situation.In addition,the credit contraction and the tightening of financing environment in China have led to the increase of investment cost of private enterprises,the limitation of financing channels has increased the pressure on private enterprises to repay bonds,resulting in a substantial increase in the amount and quantity of bond default events in 2018.The improvement of bond risk not only brings great impact to private enterprises and investors,but also destroys the stable development of financial market.Therefore,how to avoid bond default,how to maintain the stability of bond market and how to protect the interests of investors are worth studying.In this context,this paper chooses Yongtai energy as the research object to explore the causes of bond default of private enterprises and preventive suggestions.Yongtai energy is a private coal giant industry listed in a share market.It is the first substantive default of AA + bonds in China.Meanwhile,the default also triggered the "cross protection clause" of 13 bonds of Yongtai energy.Because of its huge scale and wide influence,it has attracted the attention of the capital market.Yongtai energy is a typical case in which resource-based enterprises carry out radical expansion strategy in order to obtain profits under the background of supply side structural reform and the decrease of social financing scale growth,and then fall into financial crisis,which leads to bond default.The main body of bond default in China is private enterprises.If private enterprises do a good job in identifying and preventing the risk of bond default,the phenomenon of bond default in China will be greatly reduced.It is found that the default of Yongtai energy bond is caused by internal and external factors,in which the internal cause is the main aspect and the external cause plays a driving role.The main internal reasons are as follows: the financial situation of the enterprise is not good,the solvency,profitability and cash flow situation have shown a continuous downward trend;the enterprise strategy is radical,has been operating with debt,plus a large proportion of equity pledge and asset constraints;the internal governance mechanism of the enterprise is not effective,lack of risk early warning mechanism,and lack of timely information disclosure;lack of Lack of professional team,did not make a reasonable plan.The external factors mainly include the strengthening of financial supervision and the recession of the industry.Finally,according to its causes,the paper summarizes the preventive suggestions: making timely adjustments according to the financial environment and changes in the industry;intermediary agencies should be responsible for their duties;making reasonable development strategies;improving the internal governance mechanism of enterprises.