Research On The Causes Of The Default Of Dongbei Special Steel Bonds And Its Disposal

In order to obtain long-term stable funds,many companies have chosen to issue bonds through financing.With the rapid development of China's bond market,the position of the bond market in China's financial market is gradually rising.However,credit risk is also exposed in the context of economic growth shift and industrial restructuring.In March 2014,China's first default bond,"11 Chaori Debt",was materially breached,which meant that the rigid redemption of China's bond market was broken,followed by the frequent default period of the bond market.Northeast Special Steel Bonds set a precedent for state-owned enterprises to default,and its number of serial defaults was as high as 11 times,and finally embarked on the road of bankruptcy and restructuring.The credit risk of China's bond market has also been completely released due to the break of rigid redemption.The government's actions to rescue Northeast Special Steel have not been carried out.It also reflects the marketization and legalization of China's bond market in dealing with default bonds.This paper takes the bonds that have been defaulted in China as the research object,and through the methods of statistical induction and case analysis,it studies the status quo,causes and subsequent disposal of bond defaults in China,and issues to bond issuers,investors,regulators and rating agencies.And put forward specific suggestions,and provide reference for the follow-up disposal methods of bond defaulting enterprises.First of all,this paper makes a general analysis of the current status of bond default,descriptive statistics on the status quo and characteristics of default bonds from 2014 to 2018,and summarizes the disposal methods and existing problems of bond default.The study found that private enterprises are the worst-hit areas,and the proportion of defaults and amounts is more than half.However,although the total number of state-owned enterprises is not as good as that of private enterprises,the amount of default of individual enterprises is huge,and the repayment is slow,and the process of default disposal is cumbersome.Secondly,select the local state-owned northeast special steel,analyze the reasons for its default,and compare and analyze the settlement plan and final disposal result of the default bonds of Chaozhou Company,Nanjing Yurun,Sinosteel and Guangxi Nonferrous Metals.The study found that Northeast Special Steel is a state-owned enterprise with certain credit advantages.However,as a controlling shareholder and a market supervisor,the government is more difficult to deal with when local state-owned enterprises default.On the other hand,Northeast Special Steel faces serious financial difficulties.The company's lack of liquidity is mainly due to the serious short-term bonds and the long-term occupation of funds.The excessive expansion of the company directly caused the break of the company's capital chain,which eventually led to the outbreak of bond default.After the breach of contract,Northeast Special Steel chose bankruptcy and reorganization,and the injection of private capital has been changed to a private enterprise.As of today,the amount of breach of the Northeast Special Steel has not been fully settled.By comparing with other companies' disposal methods,the adoption of follow-up security measures for issuing bond defaults is closely related to the issuer's qualifications and available resources.At the same time,it is necessary to comprehensively consider the strength of the enterprise,the coordination of the government,and the assistance of other parties.Negotiate or solve problems through judicial channels.Finally,on the basis of the analysis of the cause of the default of Northeast Special Steel,from the perspective of the prevention and disposal of bond default,the issue of bond default is taken rationally,and the reasons for default,disposal plan and market supervision are obtained from it,and the bond is issued for the bond issuers.The choice of default and bond default method provides some reference opinions,and raises the overall risk awareness of other bond market participants to promote the development of China's bond market towards marketization,standardization and legalization.