Study On The Causes And Influence Of Yongmei Group Bond Default

As an important part of capital market,bond market plays an important role in supporting the development of real economy and optimizing resource allocation.After years of development,China’s bond market has exceeded 110 trillion yuan,becoming the world’s second largest bond market.However,due to the macroeconomic downturn,business difficulties,regulatory tightening and other factors,the bond market credit risk is constantly exposed,bond default scale growth trend is not reduced.As a local state-owned enterprise with AAA grade credit,Yong Mei Holdings defaulted on bonds on November 12,2020,becoming a "black swan" event that triggered the turmoil in the bond market.Many credit bonds plummeted,many bonds were cancelled or delayed,and the bond market turmoil caused by the default continued.In the face of the new situation of bond market default,it is very important to deeply analyze the causes of bond default,explore the impact of bond default,and then find the way to prevent and resolve the risk of bond default.This paper first combs the default status of China’s bond market,and reviews the default events of Yongmei holding bonds.At present,China’s bond default presents new characteristics,mainly in: first,the scale of bond default continues to rise;second,the bond default industry "decentralization" trend is obvious;third,high-rated bond default surge;fourth,Default subject from private enterprises to state-owned enterprises.Secondly,based on the external and internal analysis perspective,the causes of Yongmei holding bond default are discussed.From the external reasons: China’s macroeconomic downturn and epidemic impact led to weak downstream demand in the coal industry,oversupply;" rating bubble " led to market selection mechanism failure;government financial resources limited,give up the guarantee;Bond market regulatory mechanism is not perfect,unable to form effective supervision.From the internal reasons: the company failed to divest the loss of non-coal business,drag down the company’s performance;and Yongmei Holdings rely on the main business advantages,successive bond issuance as a non-main subsidiary "blood transfusion ",increased the company’s financial burden;The company failed to disclose information in time and accurately,resulting in credit risk undetected and accumulated.Thirdly,this paper analyzes the impact of Yongmei holding bond default from many angles.For the enterprise itself,the refinancing ability of the company is seriously damaged;for the whole bond market,frequent bond defaults have a strong impact on the bond market: driving up the cost of financing,pushing up the risk of refinancing,raising regional credit risk;the occurrence of bond default caused credit rating agency credit crisis;seriously hit investor confidence.Finally,in order to resolve credit risk in time,reduce the occurrence of bond default events,and reduce investor losses.This paper puts forward the corresponding suggestions from three angles: issuer itself,relevant institutions and investors.