Research On Identification And Verification Of Corporate Bond Risk Factors

In 2018,China's corporate bond issuance exceeded 1.6 trillion yuan,but the number of bond market de-faults involving 118 companies which are reached a historical peak of 115.451 billion yuan.Therefore,it is of vital significance for both investors and national economy to prevent and dissolve bond risks.In practice,bond issuing intermediaries and relevant regulatory authorities need to find risks in advance and solve them so as to make their due contributions to social and economic stability and prosperity.Based on the above background,this paper selected 18 Fanhai G1,a public company bond,as an example to conduct an in-depth study on the identification and verification of issuing risk factors through the pro-cessing of financial indicators.First of all,this paper which is based on the qualitative analysis for risk identification choose two angles of issuing bonds,and issuers to make in-depth exploration risk.Risks of issuing bonds are including interest rate risk,liquidity risk,financial risk and payment security risks.In qualitative analysis,this paper analyzed the risks combined with the quantitative study of financial indi-cators such as the main financial indicators which are related to assets and liabilities index,profit index,cash flow indexes and so on.Secondly,this paper selected the angle of quantitative bond issuers-China Oceanwide Company so as to have verification in-depth using standards based mainly on two aspects.On the one hand,the model samples selected 60 companies,first selecting 15 ST companies,and then picking out 15 the ST listed companies on the corresponding in its industry.This model selected 10 indexes which are mainly involving four aspects:The asset liquidity,solvency guarantee ability,current cash structure and potential development ability.They were used to establish the risk verification model.Finally,the remaining 15 ST companies and 15 normal listed companies in the corresponding industry were used for risk screening,and the standard of risk verification T value was obtained.On the other hand,the interna-tionally popular Z scoring model,including five financial indicators,is used to measure the Z_f value.Dif-ferent Z_f values mean different financial risks.After calculation,the financial T value and Z_f value of China Oceanwide Company are in the normal range,which means the financial situation is safe.The policy recommendations of this case study are as follows:this paper based on the above analysis re-sults finally puts forward some practical suggestions for issuers,intermediaries,regulators and investors.Issuer:disclosing company information in good faith and regulating the use of funds;Intermediaries:clar-ifying the requirements of multi-party due diligence and improving the project assessment mechanism;Regulators:strengthening bond risk prevention and improving the quantitative supervision system;Inves-tor:strengthening investment reason consciousness and improving risk judgement ability.