Research On The Default Of Yongmei Holding Bonds

In recent years,China’s state-owned enterprises(hereinafter referred to as "state-owned enterprises")have frequently defaulted on bonds,breaking the belief that state-owned enterprises’ bonds are just redeemed,not only causing adverse effects on bond issuers,but also bringing chain reactions to enterprises in the same region and industry.,bringing huge risks to the entire bond market.On the one hand,the emergence of bond defaults is an inevitable process of marketization and needs to be viewed rationally.On the other hand,the market cannot allow the tide of bond defaults,but should conduct research on bond defaults,so as to provide experience and suggestions for building a more complete bond market..Among them,on November 10,2020,Yongmei Holding,a state-owned coal enterprise in Henan Province,publicly stated that due to the shortage of liquidity,the company’s bond "20Yongmei SCP003" could not repay the principal and interest of up to 1.032 billion yuan in full and on time.material breach.Since then,many of the company’s bonds have defaulted successively,causing widespread concern in the market and serious adverse social impacts.Taking into account factors such as the high market attention,wide scope of harm,and strong case typicality of the default event of Yongmei Holdings,this paper selects the default event of Yongmei Holdings as the key research object,and analyzes the causes and consequences of its debt default,risk prevention and response.At the same time,by sorting out past default cases of state-owned enterprise bonds,from multiple perspectives,summarizing the characteristics and deficiencies in the process of state-owned enterprise bond defaults,in order to prevent the default risk of state-owned enterprise bonds,and regulate the default disposal of state-owned enterprise bonds,and on this basis,it is concluded that conclusions and recommendations.First of all,this paper summarizes the literature on the reasons,consequences,risk warning,prevention and disposal of bond default,and defines the relevant concepts and introduces relevant theories in this paper.Secondly,this paper starts with the current tide of state-owned enterprise bond defaults in my country,introduces the current situation,causality,and disposal of state-owned enterprise bond defaults in China,and summarizes the uniqueness of state-owned enterprise bond defaults.Thirdly,based on the above-mentioned theories and the company’s situation,an in-depth analysis is made based on the default case of Yongmei Holding’s bonds:(1)The direct and indirect impact of Yongmei Holding’s bond default is analyzed.The direct impact is to trigger cross-default,the credit rating decline,and the company’s refinancing ability is limited.The indirect impact affects the bond market and investors.,intermediaries,and the local business environment.(2)The main influencing factors of bond default are analyzed at macro,meso and micro levels.At the macro level,the double blow of the macroeconomic downturn and the new crown epidemic has limited the company’s financing capacity and deteriorated its operating conditions.At the industry level,it involves the decline of coal industry demand,the adjustment of national policy structure and the intensification of industrial competition.At the company level,the analysis focuses on corporate strategy,corporate governance and financial performance,including diversified aggressive mergers and acquisitions,chaotic internal management and internal control,high debt repayment pressure,relatively weak profitability and limited assets.(3)Introduce and analyze the default disposal methods of Yongmei Holding’s bonds,and find that its default disposal has the following characteristics:first,the uncertainty of bond repayment is relatively high,the second is the dependence on government power,and the third is default disposal.A single approach is not conducive to long-term development.(4)To put forward relevant suggestions for preventing the default risk of Yongmei Holding’s bonds and improving the disposal of bond defaults.In terms of preventing the risk of bond default,it is recommended that Yongmei Holdings adapt to changes in the external environment and optimize the internal environment of the company.In terms of improving bond default disposal,it is suggested that Yongmei Holdings should adopt diversified bond default disposal methods,introduce strategic investors and use the default bond transfer mechanism.Finally,on this basis,it summarizes the relevant enlightenment on the default of state-owned enterprise bonds in my country,and puts forward relevant suggestions for enterprise issuers,regulatory agencies,intermediaries and investors..