Study On Credit Default Of Yongcheng Coal Power

With the continuous development of our country’s social economy,the scale of the bond market is also expanding.At the moment,the circulation of China’s bond issuance is more than one trillion yuan,this scale ranked second in the world.But while the scale of China’s bond market is developing,the risk of bond default in China is also rising.Before2014,due to the existence of unwritten rigid payment,local governments dealt with the default events,which did not cause substantial bond default.But the turning point is in our country policy emphasizes "capacity","deleveraging",especially in 2014 "11 super Japanese bonds" bond default,bond default number and scale growth trend rising,default subject from private enterprises to high-rated state-owned enterprises,especially in the new crown outbreak,economic downturn,financing environment under the influence of multiple factors,local state-owned enterprise default soared in 2020.Although when China bond market is becoming maturity under environment of market economy,the normalization of default is inevitable,but the massive outbreak of bond default including malicious default greatly affects the normal operation of the bond market.In this condition,studying Chinese credit default problem is very important.This paper will be in local state-owned enterprises Yongcheng coal in November 2020 credit default as a case analysis,Yongcheng coal as AAA rating local state-owned enterprises than expected credit default,cause the whole bond market turmoil,gradually break the investors "faith" of state-owned enterprises,also seriously hit investors’ trust in the bond market.First,the author introduces the paper involves the related concepts and theoretical basis,and then introduce the present situation of the credit bond market and bond default characteristics,and then comb the basic situation of Yongcheng coal and the whole process of credit default,then analyzes the yongcheng coal,the default,the default affect the normal operation of the financial market,improve the regional default risk,but also increase the difficulty of corporate bonds,reduce the credibility of the credit rating agencies,etc.Finally from the perspective of external factors and internal factors analysis yongcheng coal credit debt default main reasons: external factors mainly include national macro policy,capital market and industry,internal factors mainly include related party capital,the core business drag profit,enterprise business profitability,excessive reliance on issuing bonds,debt-liability ratio is unreasonable,enterprise capital liquidity ability,using higher risk of debt financing strategy,etc.By combing and analyzing the typical case of Yongcheng coal and power bond default,On the current situation of frequent credit defaults,This paper puts forward suggestions to prevent the credit default risk,reduce the investment risk of investors,and optimize the bond market environment: bond issuers to improve their business level,Optimizing the capital structure,Establish the debt repayment fund reserve system and strengthen the credit awareness of the bond issuing enterprises;Investors should strengthen their learning of expertise,Enhance the post-investment tracking;The intermediary agency performs its own duties,Maintain objectivity and impartiality;Regulatory authorities to standardize the regulatory standards,Establish a bond risk management mechanism,Strengthen information exchange among various departments.