Research On The Causes And Disposal Effects Of FUGUINIAO Bond Default

The years after the break of the unique rigid payment in China’s bond market coincided with the slowdown of China’s economic transformation.The risk of default on the bond market also gradually exposed.The domestic bond market in 2018 a large-scale centralized bond defaults,and private enterprises accounted for default subject is bigger.In this paper,the research object of FUGUINIAO Co.LTD.is among them.In the face of frequent bond default events,how to prevent the default and how to deal with it has become a problem that should be paid attention to.In this paper,the case analysis method is adopted to take FUGUINIAO Co.LTD.as the research object.On the basis of the theories related to bond default,important information such as the real-time process of default event,financial indicators and social views are collected and sorted out,and the causes and disposal effects of FUGUINIAO bond default are studied from multiple perspectives.This paper mainly focuses on the cause analysis and disposal effect analysis of bond default event.Firstly,from the perspective of external environment,the causes of bond default are revealed from the perspectives of bond-related issuance management,audit,rating and supervision institutions,as well as from the perspective of enterprises themselves.Secondly,the research on the disposal effect of bonds after default is conducted from the perspectives of different participants in the event of default,including enterprises themselves,investors,intermediaries and local governments.Finally,according to the causes of default and the disposal effect,the corresponding enlightenment is summarized.Research findings;On the one hand,in the context of the sluggish macro economy and the declining development of the industry,the wealthy bird blindly adopted the diversification strategy to lay the foundation for bond default.The investment in strategic transformation is seriously beyond its income,which leads to the debt crisis of the enterprise.However,in order to repay its debts,the company adopted a large number of defaultguarantees and capital borrowing,which further led to the shrinkage of the company’s main industry and the breakdown of the capital chain.Finally,substantial default occurred due to its insolvency.On the other hand,for the default disposal of bonds,FUGUINIAO was forced to enter the bankruptcy liquidation process after the failure of two reorganization,the disposal effect is not very ideal: investors’ creditor’s rights can not be paid off;Enterprises cannot be sustained without a takeover;However,the original major shareholders who directly caused the bond default and the intermediaries who were negligent in the management,audit and credit rating of the bond issuance were not punished according to the severity of the event.Finally,this paper summarizes the enlightenment based on the causes of default and the disposal effect,hoping to provide some useful enlightenment to enterprises,investors and the main body of market supervision related to bond issuance.