Case Study On Bond Default Of Yongmei Holding Company

With the implementation of the bond market registration system,the bond market access threshold becomes lower,and bond default events will become more and more normalized.As an important financing channel,the bond market should attach great importance to its risk prevention and control.Affected by the new coronavirus epidemic in2020,many industries in China and even the world are in a state of stagnation.The business activities of enterprises are seriously affected,and the investment and financing activities have become unsmooth.According to WIND statistics,as of December 31,2020,a total of155 credit bonds in China have defaulted,with a default scale of CNY 175.772 billion.The default subject has no obvious distinction between industries and corporate attributes,and the default subject gradually spreads to high-rated enterprises.The default scale of state-owned enterprises is large,and the influence is extensive,which has attracted wide attention from the society to the default of state-owned enterprise bonds.How to reduce the occurrence of debt default,how to choose the appropriate disposal after default,to maximize the protection of investors ' rights and interests has become the focus of market attention.Yongcheng Coal and Electricity Holding Group Co.,Ltd.(hereinafter referred to as 'Yongmei Holding ')is a famous local state-owned enterprise in Henan Province.Its two expired claims in October 2020 are paid in full on time.On November 10,2020,it suddenly announced that ' 20 Yongmei SCP003 ' had a substantive breach of contract,which caused market turmoil and suspected its existence of ' escaping debt '.Through literature research,this paper sorts out the theoretical results of previous studies to lay a theoretical foundation for this paper.By comparing and analyzing the influencing factors at the macro level,stakeholder level and corporate level,it is found that the macro environment is affected by factors such as the impact of the new coronal epidemic,the tightening financing environment and the pressure of environmental protection policies,which improves the default probability of Yongmei Holding.Stakeholders,all stakeholders in violation of the credit rating process,including the integrity of the credit rating process did not follow the rules of self-regulation of the implementation of the rating process,the lack of field interviews and field interviews with the head of the main business management department,the risk information failed to disclose in time,the existence of bond rating subject dislocation and false high problem,the lack of necessary audit procedures,Haitong Securities to assist in structured issuance and other factors have helped Yongmei Holding hidden its default risk;the root cause of the default is caused by the unreasonable debt maturity planning of the company itself,the unreasonable business structure of ' son strong mother weak ' and the non-core business dragging the overall profit.At the same time,there is also a problem of virtually increasing monetary funds,which has caused market investors to misjudge the cash flow situation of enterprises,thus triggering a super market expected default.Finally,on the basis of the analysis of the reasons for the default of Yongmei Holding Company,I put forward my suggestions in the macro environment,stakeholders and corporate governance.Macro environment,improve the emergency mechanism,formulate emergency plans;actively implement the existing policies,strengthen enterprise innovation ability;unified regulatory structure,strengthen the monitoring of bond issuers.Stakeholders,the reconstruction of credit rating system,improve the quality of rating;underwriters should practice industry self-discipline rules and abide by the principle of honesty and trustworthiness;audit institutions should maintain their independence,strictly implement audit procedures and improve the quality of audit reports.Bond issuers should focus on the development of the main industry,effectively fulfill the obligation of information disclosure,pay attention to the capital structure of enterprises,optimize the debt structure.