Case Analysis Of Yongmei Bond Default

On November 10,2020,"20 Yongmei SCP003" failed to pay when it expired,and was suspected of a substantial breach of contract.As a provincial state-owned enterprise rated AAA,it was unable to repay the 1 billion yuan of mature bonds with more than 40 billion yuan in monetary funds on the books.This caused an uproar in the market.This paper analyzes the deep-seated causes of bond defaults of state-owned enterprises from two aspects: external and internal factors by sorting out the default events of Yongmei Holdings bonds in detail.Using the analysis of financial statements and the comparative analysis of the same industry to carry out quantitative analysis,it is concluded that the reasons for the default of Yongmei Holding’s bonds are: First,from an external point of view,under the impact of the new crown epidemic and the US-China trade war in 2020,macroeconomic The economy is down,coal prices are down,and the company’s cash flow is continuing to flow out;Second,the company adopts an unreasonable debt financing strategy.In the past,it achieved the purpose of borrowing new and repaying the old by issuing bonds,but this time it failed to raise funds that need to be repaid due to maturity.Funds;Third,the profitability of the company’s coal business is acceptable,but the non-coal business is not profitable.The oil price in 2020 will fluctuate greatly,the loss of the chemical industry will continue to increase,the company’s net profit will continue to decline,and the company’s operating performance will be poor;Fourth,it is because the parent company occupied a lot of money,which led to a large amount of currency restrictions;fifth,there was false information disclosure,which made the company’s monetary funds inflated,and the company failed to timely and fully disclose it in accordance with regulations.The transaction information caused the market to have wrong expectations for the company,and there was suspicion of debt evasion.Finally,from the perspectives of regulatory authorities,intermediaries and issuers,more targeted measures are put forward to prevent the default risk of state-owned enterprise bonds: for the regulators,it can unify the bond market supervision pattern,improve the default bond disposal mechanism and information disclosure mechanism;It is said that to adhere to risk-oriented practice and maintain the independence of auditing,rating agencies can introduce a multiple rating system;for companies,it is necessary to strengthen the company’s internal control management,formulate reasonable debt financing strategies,and transform and upgrade in a timely manner.It is hoped that it will help investors to break the inherent understanding of the implicit guarantee of state-owned enterprises,find scientific and effective methods for enterprises to ease their debt burdens and mitigate default risks,and provide new ideas for the healthy and sustainable development of my country’s bond market.