Case Study On Dandong Port Bond Default

Compared with other financing instruments,bond financing has the advantages of large financing scale,low issuance cost and strong liquidity.By the end of 2018,a total of 39,194 bonds were issued in China,with a total amount of 43.76 trillion yuan.The development of China's bond market was relatively late.In 2014,the “11 Chaori bonds” default became China's first bond default event.In the following four years,a total of 308 bonds defaulted,and bond defaults occurred frequently.Established in 2005,Dandong Port has a registered capital of USD 29.8 million and is headquartered in the eastern part of the Liaodong Peninsula.The development goal is to become an international commercialization center integrating industrial parks,bonded areas,port warehousing and logistics.On August 30,2017,Dandong Port declared that “14 Dandong MTN001” could not pay the principal and interest on schedule.The default of Dandong Port Bond had a great negative impact on Liaoning's economic development.The thesis conducts an in-depth study on the default of Dandong Port bonds.It hopes to explore the deep-seated reasons of bond default through the analysis of the internal and external environment of the company,and finally provide relevant inspiration for bond issuers,regulators and investors.The thesis adopts the methods of theoretical analysis and case study.Firstly,the thesis introduces the theory of bond default and the status quo of China's credit bond issuance and default.Secondly,it introduces the basic situation of Dandong port,bond issuance,bond default of Dandong port and the reaction after default.Thirdly,the thesis analyzes the reasons for Dandong port's bond default from the perspectives of external environment and internal environment,and finds that the main reasons for Dandong port's bond default are the downward macroeconomic environment,the fierce regional industry competition,the company's internal development strategy and organizational structure defects,the decline of capital quality,and the decline of profitability.At the same time,this thesis uses the data of 34 domestic bonds to build the ZETA model,and calculates the possibility of bond default in different years in Dandong port,and finds that this model can effectively evaluate bond default.Finally,the thesis analyzes the consequences after Dandong port's bond default.The price of Dandong port's publicly traded bonds dropped sharply after the substantial default of "14 Dandong port MTN001" bonds,and the main credit rating of Dandong port and its bond rating dropped sharply.Based on the conclusion of the above case analysis,the thesis finally puts forward some inspirations for bond issuers,regulators and investors.First,on the premise of reasonable strategic goals,issuers should control their own expansion speed,strengthen the management of capital chain,and pay attention to the corresponding industry competition.Secondly,regulators of all parties should be independent enough to strengthen the management of regulators by law.Third,it is suggested that investors reserve enough financial knowledge to increase their ability to prevent risks.