| In recent years,China’s bond market has developed rapidly,and bond financing has become one of the main means of investment and financing for listed companies.However,due to the increasingly perfect operation of the bond market,the case of bond default also presents a gradually rising trend.The frequent occurrence of bond default cases will increase the credit risk in the bond market,increase the financing cost of the company,and also bring losses to shareholders.Therefore,in-depth study of the company’s bond default situation and analysis of the causes of default,find the internal business,management and other related problems,and put forward countermeasures to prevent and reduce the bond default crisis is imminent.The actual controller of Brilliance Automobile Group Holding Co.,LTD.,also known as brilliance Automobile Group,is the State-owned Assets Supervision and Administration Commission of Liaoning Province.On October 23,2020,the second phase of the 2017non-public offering of corporate bonds of Brilliance Auto Group Holding Co.,Ltd.was due,and the company was unable to pay the principal and interest of the bonds on time,resulting in actual default.By the end of 2020,brilliance group has 14 outstanding bonds with a total amount of 17.2 billion yuan,all of which have triggered defaults.Based on the domestic and foreign research results of bond market risk and bond default,this paper firstly introduces the basic situation of Brilliance Auto,and combs and summarizes the process and follow-up of bond default.Secondly,this paper focuses on analyzing the reasons for the bond default of Brilliance Auto from the external environment and the internal aspects of the company.From the external environment,brilliance Automobile industry is in a certain predicament;Affected by the epidemic,the production and sales volume of enterprises also decreased.And the regulatory level is also important.And in the enterprise internal level,also have the following factors make Brilliance auto bond default event.Since 2015,the net assets of the parent company have been negative,and the capital gap has been expanding,due to the large financial leverage of the company and the weak profits and low asset quality of Brilliance’s own brands.The forthcoming spin-off of BMW Brilliance also dealt a major blow to the refinancing ability of enterprises.The government basically gave up the rescue,and finally the capital chain was broken.The strategic decision and positioning of the enterprise is also the main cause of the bond default of Brilliance Auto.The radical financing strategy of the enterprise makes Brilliance Auto face great financial risks.However,due to the failure of effective risk control in corporate governance,the financial risks gradually accumulate.Finally,after in-depth study of brilliance auto bond defaults,this paper puts forward the company need to focus on developing their own core competitiveness,establish a system accords with the enterprise strategy goal of capital operation and financial management specification,at the same time also must keep good debt structure,the formation of a sound financial system to prevent,reasonable to guard against financial risks,maintain a good development momentum.It is also necessary to do a good job in market supervision and management,establish a sound mechanism and corresponding rules and regulations,and take corresponding measures before and after bond issuance and bond default to ensure the steady development of the bond market.Issuers and underwriters must abide by their information disclosure obligations,and credit rating agencies must guarantee the credibility,authenticity and timeliness of credit evaluation conclusions to safeguard the rights and interests of investors.This paper hopes to provide useful reference for Brilliance Auto and related industries and enterprises in preventing bond default through the analysis of brilliance Auto Group’s bond default. |
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