Research On The Causes Of Bond Default And Risk Prevention Countermeasures Of State-owned Enterprises

Since the establishment of China’s bond market in the 1990 s,the market scale are growing,the transactions are becoming more and more frequent,and the business is increasingly complex.Under the restriction of high standards and requirements,China’s bond market has developed steadily,and the market scale has reached the second in the world.However,the default of "Superday Debt" in 2014 and "Tianwei Debt" in 2015 not only broke the calm,but also shook the deep-rooted belief of rigid cashing in the bond market.Since 2018,a large-scale "wave of default" has swept through China’s bond market.The default characteristics have developed from sporadic defaults in early local areas and private enterprises to a series of explosions of high rated state-owned enterprises.In 2020,many high-quality state-owned enterprise issuers such as Tsinghua Ziguang,Peking University Founder,Brilliance Group and Yongmei Holdings announced bond defaults one after another,which hit the confidence and enthusiasm of the market again and again,and once caused a crisis of trust among investors.In this increasingly fierce "wave of default",the market turmoil caused by the default of Yongmei holding bonds in 2020 is the most intense.As the largest coal enterprise in Henan Province,Yongmei holdings announced that it was unable to pay the principal and interest of a 1 billion yuan bond with 100 billion assets and 10 billion cash in hand.Under the influence of multiple factors such as capital occupation,illegal disclosure and cross default,eventually more than 50 billion yuan risked the debt market.At one time,market panic broke out-in the month of default,a large number of bonds were postponed,the prices of similar bonds in the duration fell sharply,a large amount of funds withdrew from the bond market,and the refinancing ability of the industry decreased.Focusing on the default event of Yongmei debt,this paper combs the process and economic consequences of default,interprets the relevant financial statements and announcements of major events,and collects and judges the industrial economic data.The study found that the operation of Yongmei holdings relies too much on debt financing,and the unreasonable debt structure has greatly increased the pressure of short-term debt repayment.At the same time,the traditional coal industry is in the economic downward cycle,superimposing the adverse effects of policy tightening,which makes the company’s profit power insufficient,directly leading to the rupture of the capital chain and the inability to repay the principal and interest on schedule.In addition,many external factors,such as dereliction of duty of market intermediaries,false high credit rating and the concept of rigid cashing,objectively covered the real default risk of Yongmei holdings,enabling it to continuously expand the scale of debt in the case of high debt,and finally substantive default.This paper tries to summarize the influencing factors of the default risk of state-owned enterprise bonds by exploring the characteristics and causes of Yongmei bond default.At the same time,on this basis,this paper puts forward effective risk response strategies from the perspectives of investors,issuers,intermediaries and regulators,so as to lay a foundation for China’s bond market and relevant state-owned enterprise issuers to deal with the risk of bond default.