| Before 2014,because of the Invisible rigid redemption,the Chinese bond market is developing rapidly,there is no bond default,bond investment basically means “zero risk” in the minds of investors.But the first bond default occurred in the Chinese bond market in 2014,which is “11 CHAO RI bond”,breaking the record of zero default in Chinese bond market,also breaking the unwritten rule of rigid redemption.Since then,with China’s macro economy has begun to decline,industrial restructuring and upgrading,and economic deleveraging policies,a large number of enterprises that belong to overcapacity industries have gone bankrupt and default due to financing difficulties.At the same time,in 2018,due to the sluggish global economic growth coupled with trade war,the bond market also experienced a large number of defaults.In 2018,the number of bonds in default reached 124,with a total amount of 120.56 billion yuan..Therefore,it is foreseeable that bond defaults will enter into the normalization stage in Chinese bond market.Bond defaults in Chinese bond market become frequently,although it has not caused huge fluctuations in the entire social economy,but bond financing is one of the important ways of corporate financing,If bond defaults occur frequently,it will lead to a sharp decline in market credit,and then not only will investors suffer losses,but companies will also lose an important financing channel.In this context,this article chooses Dalian Machine Tools Group,which representative traditional overcapacity industry,through a detailed analysis of the causes and consequences of the bond default in Dalian Machine Tools Group,we strive to find out the characteristics and commonalities of defaulting companies,and give different suggestions for different participants in the bond market,in order to contribute to the healthy development of the bond market.This article takes Dalian Machine Tools Group as an example for analysis.Firstly,the background of this case study is introduced,and domestic and foreign literature on breach of contract is sorted out,at the same time,it also introduces relevant theories of bond default,including financial distress theory and information asymmetry theory.Secondly,it introduces the history of Dalian Machine Tools Group and the stockholder’s ownership,meanwhile,the company’s bond default behavior was sorted out in chronological order from the occurrence to the subsequent disposal.In the following part,this paper analyzes the causes of corporate default from macro,medium and micro perspectives,and the reasons for bond default are analyzed respectively from macroeconomic,industrial characteristics,corporate finance and external factors.The next part gives different suggestions to different participants in the bond market for the reasons of default of Dalian machine tools Group,including the issuer should choose the appropriate development strategy,pay attention to the company’s financial situation,for regulators and rating agencies,they should formulate more reasonable credit rating system and strengthen the construction of information disclosure system,for investors,they should form correct investment concepts,strengthen their risk awareness and so on.The last is the conclusion and outlook,this paper hopes that through the case analysis of Dalian Machine Tool’s bond default,it can provide some reference and suggestions for the same industry enterprises and other relevant participants in the market,and help China’s bond market develop better. |
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