Case Study On Default Of Feima Investment In Exchangeable Bonds

September 27,2018 and 28 th,Pegasus Investment Holdings Limited defaulted on its failure to pay due interest and related resale payments to the two previously issued convertible bonds,which is the first interchangeable bond in the country to have a substantial default,which is "16 Feitou 01" and "16 Feitou 02" respectively.Convertible bonds have many advantages,deeply loved by the main body of the bond market,for investors,because of the provisions of the Stock Exchange clause,there is a certain guarantee,can choose to expire to take back the principal and interest,but also through the exchange of shares to achieve higher returns.For issuers,the use is very broad,can help issuers to achieve low-cost financing,but also to achieve a smooth reduction effect,that is,will not be due to a large reduction in the company's share price.Therefore,after the successful issue of the first private equity can be paid in 2013,the debt can be paid frequently in the view of everyone,in recent years,the exchange of debt has been widely used and rapid development,especially private convertible bonds,deeply loved by the issuing body,showing a blowout development trend.As a kind of bond,although the advantages of debt can be numerous and popular,but there is also a risk of default,and from the Pegasus investment paid for debt default can be the risk of debt has begun to be revealed.Convertible bonds as a kind of emerging bonds in China started late,the course of development is still short,not very mature,although as a new type of bonds to meet the diverse needs of issuers and create a new investment tool for investors,but its provisions are complex,and ordinary bonds are very different,coupled with its rapid development,Inevitably exposes a lot of problems.In recent years,the bond market has developed at a faster pace,but the default events have also increased,and the risk problems in the process of bond market development have been the focus of attention.Bond defaults will not only cause great losses to investors,but also have a great impact on issuers,and for convertible bonds,bond defaults will have an impact not only on the issuers and investors of bonds,but also on the operations,share prices and credit of the underlying companies.This case analysis of Pegasus investment in convertible debt default is of great significance for financial risk prevention,securities market and the healthydevelopment of financial market as a whole.This paper first expounds the background and significance,research methods and structure of the default event of the Feima Investment convertible bond,and then gives a specific description of the whole event from bond issuance to bond default to coping measures,and then uses case analysis method to analysis from the theoretical analysis and case analysis of the two aspects of Pegasus Investment convertible bond default case analysis,because of the particularity of convertible bonds,bond default is not only related to the solvency of the issuing subject,but also has a very large relationship with the stock price of the target company Pegasus International,so this paper starts from the investment of Pegasus International and Pegasus respectively,from the macroscopic environment,the company's own business,financial analysis and the provision of debt-to-pay provisions to analyze the causes of default.In addition,the Z-score model is applied to analyze the early warning system of bond default.The analysis results that the default event of convertible bonds has a great relationship with the lag of supervision and rating,the lack of investors ' risk identification ability,the management decision and financial situation of the enterprise itself,and the lack of a perfect early warning system.Finally,this paper puts forward some suggestions on issuers,investors and supervision from three aspects,so as to explore the application of convertible debt in practice,and provide some reference for bond issuers,investors and regulatory departments.