Causes And Risk Prevention Of Default Of Enterprise Credit Bond

The operation and development of enterprises must depend on financing.Financing through issuing credit bonds is an important channel for enterprises to raise funds.Credit bonds refer to bonds issued by governments at all levels,central banks and other institutions other than policy-oriented financial institutions.Market investors decide whether to invest in the bond or not by judging and analyzing the credit quality,operating ability and asset status of the debtor.Compared with interest rate bonds,the investors of credit bonds bear more investment risks,so the investors of credit bonds will demand higher return as compensation for risk.The occurrence of credit default will cause adverse effects and actual damage to the market participants(issuers,investors,regulators).Based on the case study of "16 environmental bonds" default event issued by Shenwu Environmental Protection Technology Co.,Ltd.,this paper explores the default factors of credit bonds,and puts forward corresponding preventive measures.The research shows that there are many factors causing the default of "16 environmental debts",including external factors and internal factors,and there are complex interactions between external factors and internal factors.Among them,the external factors mainly include macroeconomic operation,industry development,the overall situation of the bond market,credit rating,public opinion,repossession of investors and liquidity of guarantors.The internal factors mainly include the financial situation of enterprises and capital occupation.At the same time,there are both direct and indirect factors in these factors.Indirect factors affect the occurrence of default by influencing the direct factors.The direct factors mainly include the liquidity situation of enterprises and the resale of investors.Other factors can be classified as indirect factors.To realize the healthy development of the credit bond market,we must take active precautions against the default risk of the credit bond.In view of the different factors causing the default of the credit bond,this paper gives the corresponding precautionary measures.From the point of view of the issuer of the bond,we need to strengthen our ability to prevent and resolve the default of the credit bond,and also need the joint efforts of other parties in the market to actively create a good external environment,so as to reduce the default risk of credit bonds.I hope that through this study,we can provide some reference for further improving the credit bond market in China,and also provide reference for all kinds of market participants.