Research On Corporate Bond Default Under The New Normal Of China’s Economy

After material breach occurred from "11 Chaori Bond" in 2004,the rigid payment in the bond market is broken.In recent years,bond default has been"normalized" in China and the subject of bond default has been "enlarged",China had282 defaulted bonds,with a cumulative default amount: 223.229 billion yuan by December 31,2019.In this background,it is urgent and realistic to explore the causes of bond default and find out the countermeasures to reduce the risk of bond default.July 5,2018,Yongtai Energy published the official announcement: the company can not pay 17 Yongtai Energy CP004’ s interest and principal.And this bond default objectively triggered the "cross-protection clause" disclosed in the prospectus or directional agreement of Yongtai Energy’s 13 bonds during the duration of these bond.Due to December 2019,Yongtai Energy has defaulted on 18 bonds,among which 12 bonds materially defaulted,ranking the first in the number of bonds defaulted by private enterprises.The reasons behind its default are worth in-depth analysis and exploration.Yongtai Energy’s bond default case is typical,and the data sources are easy to gain,therefore,this paper chooses Yongtai Energy as a case to study.This paper is divided into seven chapters on the research of Yongtai Energy’s bond default under the new normal of China’s economy.The first chapter is the introduction.Firstly it introduces the research background and significance of this paper.Secondly it processes domestic and foreign research on bond default factors and countermeasures.And also on the basis of the review on the previous research,this paper proposes the research ideas,contents and methods,as well as the main contributions and limitations of this research.The second chapter is contained concept definition and related theories,it mainly defines the concepts of bond financing and default,cross default,material breach and rigid payment,also introducing the theoretical basis of this paper like information asymmetry,balance,debt maturity,signal transmission theory.Chapter three analyzes the new normal economy impact on China’s bond market. On one hand,it expounds the bond market development.On the other hand it increase corporate bond default risks.The fourth chapter introduces the Yongtai Energy default bonds case,and sorts out this bond default process,which laid a foundation for the subsequent case analysis.Chapter five analyzes the reasons for Yongtai Energy default bonds.This chapter is the thesis core.It is from three aspects of macro,industry and enterprises own micro factors to analyzes the reasons for Yongtai Energy default bonds.The sixth chapter according to the reasons for Yongtai Energy’s default bonds in chapter five,put forward some suggestions to Yongtai Energy on preventing default bondsfrom two aspects of the company’s strategic and financial planning.Chapter seven is the research conclusion and enlightenment.Through the research on Yongtai Energy’s default under the new normal of China’s economy,we get the conclusion,and draw inspiration in order to provide a reference for the regulatory party,credit party,other enterprises,investors.By studying Yongtai Energy’s bond default case under the new normal of China’s economy with the method of case analysis,literature review,the combination of qualitative and quantitative methods,comparative analysis,specification method,the main conclusions of this paper are as follows: First,the macroeconomic environment change affects the development of enterprises,and then affects whether enterprises can repay bonds in time.Second,the industry development will also affect the enterprises development and bond repayment.When the industry is in a downturn,enterprises are more likely to default on bonds.Third,the enterprises own operating conditions directly affect the bond solvency.There are two main contribution in this paper.First,the research perspective is novel.Most scholars prefer to study the common causes of bond default of enterprises and propose general measures applicable to most enterprises.This paper focuses on the causes of bond default of Yongtai Energy,and puts forward relevant measures to prevent bond default of Yongtai Energy,which is unique.Second,the research object is unique.Private enterprises have become the enterprise group with the largestnumber of bond defaults and the largest accumulative default amount.It is of distinct times to analyze the bond defaults of private enterprises in China in combination with the new normal of the economy.Moreover,Yongtai Energy’s bond default is a relatively significant cross-default case with a recent impact,and its bond default number has occupied the first place among private enterprises,which is typical.