Analysis On Bond Default Of Private Listed Companies In China

Since the reform and opening up,with the continuous growth of China’s economy,China’s bond market has been developing forward,and meanwhile,more and more bond defaults have been occurring.In 2011,some bonds issued by enterprises in China’s bond market defaulted.However,due to the coordination between the government and relevant financial institutions,the bond market in China continued to maintain the characteristics of rigid payment,which protected the interests of relevant parties.But in recent years,China’s GDP growth is slowing,macro-economic downward pressure is more and more big,in order to further promote the supply side structural reform in our country,the national rollout reform measures to integrate related industries,and some backward production capacity,or in a business cycle of credit risk began to be released continuously,the credit risk of the bond market in our country has begun to gradually broke out.In 2014,the default of"11超日债"completely broke the characteristics of rigid payment in China’s bond market.In 2018,listed companies began to become the main force of bond defaults.It is generally believed that,compared with ordinary enterprises,the corporate governance system of listed enterprises is more perfect,the relevant information disclosure system is stricter,the financing methods of enterprises are more diverse,and the financing difficulty is lower.Since 2018,however,the private listed companies begin to become the new bond defaults,this shows that Chinese private listed companies to some extent its own operating problems,and compared with general enterprise in the market,the private listed companies appear bond defaults to the impact of the market is bigger,will no doubt be obtained more attention to the interested party.Techcent Environment is a small and medium-sized private listed company in China.On March 25,2019,the"16天翔01"bonds issued by Techcent Environment defaulted due to the failure to meet the principal and the third installment of interest.In this paper,in the case of default of Techcent Environment,using the method of case analysis to Techcent Environment of bond defaults were analyzed,and the environment and use the Z-score model and KMV model to measure the results and Techcent Environment in the share price and debt market implied rating of Techcent Environment bond defaults on credit risk early warning analysis of the final to the market main body corresponding Suggestions are put forward.First,this paper analyzes the private listed companies in China in recent years basic situation of the bond defaults and collates and statistics of the our country in 2018 and 2019 in the first half of the new bond defaults among involves the basic situation of Chinese private listed firms,and the statistics of the default subject bond defaults when the asset-liability ratio of private listed companies and the proportion of equity pledge,found in 2018 and 2019 in the first half of Chinese private listed companies debt default has concentrated in economically more developed areas,industry distribution is more dispersed,and three obvious features associated with the corporate liquidity;Then it introduces the default case of Techcent Environment bond,and sorts out the process of Techcent Environment bond default event and the subsequent disposal measures.Secondly,this paper analyzes the causes of bond default of Techcent Environment bond from both internal and external perspectives,and finds out the causes of bond default of Techcent Environment bond.External factors include the downward trend of macro economy and the tightening of external financing environment.Limited refinancing of enterprises leads to capital chain fracture and reduced profitability of enterprises.The internal factors are Techcent Environment radical corporate development strategy and the non-operating capital occupied by the controlling shareholder,resulting in the company’s performance loss and the shortage of capital liquidity,thus increasing the credit risk of Techcent Environment.Techcent Environment at the same time credit risk early warning analysis,selection of Techcent Environment in the first quarter of 2014 to 2019 in the second quarter of the relevant data,using the Z score model and KMV model to measure the Techcent Environment during this period of credit risk level,measure results show that this period Techcent Environment Z values and default distance in a downward trend,level of credit risk in a rising trend;For full and accurate measurement in the first quarter of 2014 to 2019 in the second quarter Techcent Environment level of credit risk,select Z-score model and KMV model to measure the results and Techcent Environment during this period of share price movements,compares and analyses the debt markets in the implicit rating basic confirmed Techcent Environment company environment in the fourth quarter of 2018 to 2019 in the second quarter of credit risk levels rising,and bond default Techcent Environment occurs in the timing of the events.Finally,this paper puts forward some Suggestions from three aspects: bond market supervision,corporate managers and investors.Bond market regulators should alleviate the financing difficulties of private enterprises,reduce the risk of bond default of private listed companies,improve the information disclosure system,establish a sound investor protection mechanism,and protect investors’ interests.The company should pay attention to industrial risks,formulate development strategies rationally,avoid blind and radical development,optimize the corporate governance structure,and improve the level of risk control.Investors should also enhance their awareness of risks,improve their ability to protect their investment rights and interests,and pay attention to the financing structure of issuers.