Analysis Of Liaoning Corporate Bond Default Cases

The bond market is not only gradually becoming a relatively mature financing channel that closely matches China's social and economic development but become an important part of China's capital market after more than 30 years of development.Although the Chinese bond market has become the third largest bond market in the world,potential credit risks are gradually emerging with the rapid development of the bond market.There has never been a bond default in China's bond market because of the existence of rigid redemption and implicit guarantees for a long time.However,Shanghai Chaori Group's “11 Super Day Debt” suffered a substantial breach of contract in March 2014,which ended the “zero default” miracle in China's bond market.Since then,defaults usually occurred,and the number of China's bond defaults in 2018 reached the highest value in recent years.It can be seen that exploring the root causes of bond defaults,preventing default risks,coping with bond defaults,and ensuring the healthy and orderly development of the bond market are the primal issues that we are facing and urgently need to solve.In this paper,Liaoning corporate bond default incident is taken as a research case to investigate and study the bond default process and the reasons for default.Liaoning corporate bond default is a large-scale regional default event that occurred with the increase of supply-side reform,overcapacity and economic pressure.Northeast Special Steel Group is the first state-owned enterprise which have bond default in China,while Dandong Port Group and Dalian Machine Tool Group belong to local private enterprises.All three companies have suffered from serial bond defaults,which is closely related to the economic downturn in Liaoning and overcapacity in the industry.In this paper,the implications of bond defaults from three aspects: bond issuance,regulation and investment were summarized.First of all,not only the research background,significance,the main content,methods but also the ideas of the research are clarified.Secondly,the base conditions of these three companies are briefly introduced,and bond default process and disposal progress of these three companies were comprehensively reviewed and sorted out.Then,the reasons for default of Liaoning corporate bond default were analyzed from the macro,meso and micro levels.Besides,the macroeconomics,regional factors and company's financial situation are also deeply analyzed.Finally,corresponding countermeasures and suggestions from three different levels of bond issuance,supervision and investment are proposed on this basis from the viewpoint of bond default prevention and disposal.