Study On The Contagion Of Default Risk Of State-owned Enterprises’ Bonds Under The New Asset Management Regulations-Yongmei Group

At present,China has become the second largest bond market in the world,and bond financing has gradually become an important channel for enterprises to raise funds.However,since2014,bond defaults have occurred frequently,which has dealt a heavy blow to the participants in China’s capital market and seriously hindered the sustainable and healthy development of China’s bond market.The risk of bond default will not exist in the subject of bond default,but will be transmitted to other subjects through various equity relations and economic relations.This dynamic transmission process is likely to form a systematic major risk event.Under the background of the new asset management regulations,it is clearly required to break the rigid payment,formulate unified supervision standards,put an end to the establishment of fund pools,eliminate multi-layer nesting of products,etc.,and reduce the bond default rate by standardizing the bond market order,thus reducing the impact of default risk contagion.China’s state-owned enterprises have the belief of rigid exchange and the implicit guarantee of the government,and the development of state-owned enterprise default is closely related to the government’s willingness and ability to support it,so the market pays more attention to the bond default of state-owned enterprises.This thesis chooses Yongmei Group,a state-owned enterprise,as the case study object,and analyzes the dynamic contagion process of its bond default risk inside and outside the enterprise.The contagion of bond default risk in enterprises is mainly based on the contagion paths such as controlling equity and associated guarantee.Yongmei Group,the risk source,spreads the risk to the parent company Henan Energy Group and its holding subsidiaries through the contagion paths,which has an impact on the market performance,credit rating,financing cost and efficiency of associated enterprises.The contagion of bond default risk outside the state-owned enterprises is mainly based on the infection paths of interest-related institutions and the same industry market.The risk of bond default of Yongmei Group appears spillover phenomenon,which impacts the performance of enterprises in the same industry or region in the primary and secondary bond markets to a certain extent.The main impact result is that it is difficult to issue bonds in the primary market and a large number of bonds are sold in the secondary market.In addition,according to the characteristics of different enterprises and markets,this thesis analyzes the reasons why each subject is infected by bond default risk,so as to provide effective suggestions for state-owned enterprises to curb and prevent risk infection.Through research,the risk of bond default will have different effects when it is transmitted to different subjects.Generally,there are more or less commonalities between infected enterprises and bond default enterprises,among which the infection degree of affiliated enterprises,enterprises in the same industry and region may be more serious.The introduction of new asset management regulations requires breaking the existing "rigid redemption" and bursting the rating bubble.Although it will lead to potential risk exposure in the bond market in a short time,it will be conducive to its stable and healthy development in the long run.In this context,whether it is the market,enterprises or third-party institutions,they should enhance their risk awareness and enhance their risk prevention ability,so as to avoid the contagion and escalation of bond default risk.