Analysis And Prevention Of Default Risk Of Private Enterprise Bonds

Private enterprises are an important mainstay of the socialist market economy.The rapid expansion of private enterprises is closely related to the rapid development of China’s bond market.Bond issuance has become the most important external financing means for private enterprises.However,with the increase in the issuance of private enterprise bonds,the drawbacks of bond issuance have gradually emerged,and the number and amount of bond defaults related to private enterprises are increasing day by day.The frequent default of private enterprise bonds not only leads to the collapse of the credit center of the bond market,increasing panic among bond investors,but also makes it more difficult for private enterprises to refinance,which restricts the sustainable and stable operation of private enterprises and seriously affects the stable development of China’s financial market and social economy.Therefore,analyzing and effectively identifying the default risk of private enterprise bonds is crucial for promoting the prevention of default risk in private enterprise bonds.This article takes the default event of XY Company as the case subject,and uses a combination of qualitative and quantitative analysis to conduct research and propose prevention suggestions.This article first reviews the literature on bond default theory,default risk,and prevention.Secondly,it introduces the current situation of China’s private enterprise bond default market.Then introduce the XY company case,conduct internal and external default risk analysis after reviewing the basic situation of the case,and effectively identify default risk using the Z-score and KMV model.Finally,based on the case analysis of XY Company,suggestions and summaries are proposed from four perspectives: regulators,intermediaries,enterprises,and investors.Through this study,it is shown that: Firstly,the default risk of private enterprise bonds is influenced by macro environment,industry characteristics,external regulation,as well as corporate strategy,guarantee management,and financial constraints.Secondly,relevant stakeholders can analyze risks through financial indicator and non-financial indicator,and can use Z-score and KMV models to reduce risk measurement bias and increase prediction accuracy.Third,to prevent the default risk of private enterprise bonds,we should promote the construction of the bond supervision database sharing system,establish the enterprise bond insurance system,and improve the default bond disposal mechanism;Intermediary institutions should strengthen their management responsibilities,establish a service library for intermediary institutions,and actively assist issuers in improving their operations;Enterprises themselves should adapt to macro environmental trends,constrain their own behavior,and engage in moderate investment and financing;Investors should not only strengthen their learning and risk identification abilities,but also pay more attention to tracking risks and improving overall investment returns.