Research On Bond Default Of Macrolink Holding Co.,Ltd.

The bond market is an important part of the financial market.It has a very powerful financing function,which enables enterprises to obtain funds quickly and conveniently,and can well meet the capital needs of enterprises.Therefore,bond financing has become the main financing channel for many private enterprises.However,in recent years,with the transformation of economic development mode and the breaking of "rigid redemption",bond defaults have become normalized.Since 2015,the coverage of defaulted bonds in my country has expanded,and the number of defaulting entities has increased,but they are mainly concentrated in private enterprises.Therefore,it is conducive to promoting the healthy development of my country’s bond market by studying the cases of private enterprise bond defaults and deeply analyzing the reasons for their defaults.The purpose of this paper is to reveal the relationship between diversification expansion and bond defaults.This paper collects and sorts out a large amount of relevant literature and constructs an analytical framework of "diversified expansion → cash flow stress → bond default".When exploring how diversification expansion leads to bond defaults,we choose to start from the three perspectives of financing,investment,and operation,highlighting the mechanism of diversification expansion on bond defaults.Through the research on the bond default of New Hualian Holdings,this paper draws the following conclusions:(1)Supporting the diversification expansion by issuing new bonds to repay the old bonds,once the expected benefits are not produced,it is easy to break the capital chain and cause bond defaults.(2)The mechanism of diversification expansion on bond default can be attributed to the joint effect of three aspects: financing,investment and business activities.The asset-liability ratio of New Hualian Holdings has been high for a long time,the debt structure is unreasonable,and the debt repayment pressure is too high;and the foreign investment has not produced good benefits,resulting in a large loss of funds;at the same time,the performance of diversified operations is not satisfactory,and the cash flow tends to Tension,in the absence of guarantee of repayment of the principal and interest of the bond,caused the default of the New Hualian bond.(3)The default of bonds will definitely bring serious harm to the enterprise.The default of New Hualian Holdings’ bonds has caused adverse consequences such as the decline of the company’s credit rating,the cross-default of outstanding debts,the restriction of assets,and the deterioration of financial indicators,which has caused a great impact on the company itself and its subsidiaries.Through the research of this paper,it can provide a new perspective for the study of bond default.At the same time,this paper puts forward relevant suggestions for companies that issue bonds to raise funds for diversification and expansion,and help them improve their ability to prevent the risk of bond default,which is conducive to promoting the stable development of my country’s bond market.