Analysis On The Causes And Economic Consequences Of The Bond Default Risk Of Zhuhai Zhongfu

Since the recovery of China's bond market in the 1980 s,after a period of rapid development,there has been a qualitative leap in the scale and quantity of bond issuance.While enhancing the financing capacity of Chinese enterprises,it has also become more and more Many participants are active in China's financial market.However,as the bond market continues to develop,the associated credit risk is also increasing.In this case,market participants need to strengthen their ability to identify and respond to credit risks.At present,China's bond market is still in the development stage,and the degree of marketization is insufficient.In the process of bond marketization,bond default is inevitable.In the development process of China's bond market,due to the existence of the "rigid redemption" unspoken rules,there has been no substantive default for a long period of time.The government will cover the bonds that may be breached,which seriously hinders the marketization of China's bonds.process.However,in recent years,bond defaults have occurred frequently,“rigid redemption” has been broken,and the bond market has entered the normal stage of default.On May 26,2015,Zhuhai Zhongfu issued an announcement stating that the company could not repay the principal and interest of the “12 Zhongfu 01” corporate bonds in full within the prescribed time limit.The company's bonds officially declared a breach of contract.At the time of bond issuance,the “12 Zhongfu 01” company gave the AA grade to the rating results of the company and the bonds in the rating agencies.However,due to the macroeconomic downturn and the deterioration of the industry environment,the company's operating conditions were in problems and continued to suffer losses.The financial situation is worrying.In less than two years,Zhuhai Zhongfu's “12 Zhu Zhongfu MTN1” issued in 2012 also declared a breach of contract,which caused a huge response in the bond market.This paper will take Zhuhai Zhongfu's two bond default events as the research object,analyze the causes and effects of the two bond default events,and systematically explore the four different levels of industry,bond market,company and supervision,the cause of bond default risk and its economy.The consequences are analyzed in depth to obtain relevant conclusions and inspirations.Through the analysis of the Zhuhai Zhongfu bond default case,we can get the following conclusions:(1)The low corporate governance ability is the main risk of bond default.(2)The low risk of investment risk is not conducive to the long-term development of the bond market.(3)The rating agencies did not play a warning role in the bond default incident.(4)The regulatory authorities are not paying enough attention to bond default events.In this way,we also get the following enlightenment:(1)Improve the company's governance level to reduce the company's credit risk.(2)Strengthen the promotion of corporate bonds to raise investor awareness.(3)Improve the bond credit rating system to guide the healthy development of the market.(4)Strengthen supervision to ensure the orderly operation of the bond market.