Analysis On The Bond Default Risk Of Resource-based Local State-owned Enterprises

Compared with foreign bond markets,Chinese bond market started late,but it develops rapidly.With the continuous expansion of Chinese bond market,some enterprises have low solvency and high financing cost.In addition,many enterprises expand by borrowing excessively,the leverage becomes higher and higher,and there is a large bubble in the market,and the pressure of debt repayment gradually increases.While the asset scale of resource-based enterprises is constantly expanding,their liabilities are also constantly expanding,bond defaults are constantly occurring,and related enterprises in the coal,steel and non-ferrous industries have increased their losses and receivables.Resource-based local state-owned enterprises are faced with greater challenges.The number of bond defaults keeps increasing,the financial situation deteriorates,and the warning from rating companies gradually breaks investors’ cognition of the rigid payment of local state-owned enterprises’ bonds.Therefore,it is very important to analyze the default risk and prevention of resource-based local state-owned enterprises’ bonds.Resource-based local state-owned enterprises have a prominent impact on the local industrial structure and economic advantages.Relying on local resource advantages,they can achieve rapid growth through effective management and timely innovation.Resource-based local state-owned enterprises often have a high rating of bond default subject,and the risk of bond default is larger.As early as 2009,it became the first coal enterprise in Henan Province whose coal production exceeded 50 million tons.Since 2013,its main rating has been kept at "AAA" level.In the bond default in 2020,the default amount reached 1 billion yuan,which is very prominent among resource-based local state-owned enterprises.Subsequently,China Credit International downgraded the main rating of Yongcoal Holdings from "AAA" to "BB",and the related bond ratings were also downgraded.The default triggered panic in the bond market and caused much greater market volatility than the default of private enterprises.This default event is a typical representative of the bond default cases of resource-based local state-owned enterprises.In this paper,financial distress theory,information asymmetry theory and broken Windows theory are used for theoretical analysis,Z-score model is used to measure the case risk performance,and the default risk faced by resource-based local state-owned enterprises and the causes of the risk are summarized.Yongcheng Coal Power is selected as a typical representative.By using the methods of case analysis,induction analysis,quantitative and qualitative combination,through the analysis of the causes and effects of this event,the enlightenment of Chinese resources local state-owned enterprises bond default enterprises,warning,we should constantly improve their own pain points,consider whether there is a greater risk in their business planning,the bond market should improve the market mechanism.We will supervise and promote the development of local state-owned enterprises in a better direction,and enhance the authority and credibility of rating agencies.The research on the bond default risk of resource-based local state-owned enterprises plays a positive role in the sustainable operation of resource-based local state-owned enterprises,the healthy development of bond market and rational investment of investors,as well as in industrial upgrading and reasonable financing.