Although China’s bond trading market is booming and has developed into the world’s second-largest bond market,due to the long-term expectation of "rigid cashing",the first default did not occur until 2014.Under the background of the deepening of China’s macro-economic reform and the deepening of China’s automobile manufacturing industry in 2020,as well as the continuous development of China’s domestic and foreign financial policies,the risks of China’s automobile industry are gradually exposed.On October 23,2020,Brilliance Automobile Group Holding Co.,Ltd.(hereinafter referred to as"brilliance group" [brilliance Automobile Group Holding Co.,Ltd.referred to as "brilliance group" from the interpretation of the bond prospectus and annual report] ",an old key state-owned enterprise controlled by Liaoning state owned assets supervision and Administration Commission,failed to honor the 2017 non-public corporate bonds of brilliance Automobile Group Holding Co.,Ltd.(the bond is referred to as:"17 Huaqi 05"),a substantial default occurred on the private placement bonds with a scale of one billion yuan.Using the method of case study,this paper describes the process of brilliance group’s default,deeply analyzes the causes of its default,and finally draws the following conclusions and Enlightenment:(1)brilliance group’s excessive dependence on joint venture brands and weak independent brands lead to the lack of core competitiveness,business difficulties and financial risks,and finally lead to the cash flow gap,which is the fundamental reason for bond default.(2)Relevant rating agencies failed to play their due early warning function in this bond default.(3)The supervision of regulators is not in place.Therefore,combined with the above reasons for bond default,this paper also puts forward the following suggestions to prevent bond default:(1)the bond issuing body should not blindly exaggerate and rely too much on joint ventures,should strengthen the research and development of its own brand and improve the core strength of market competition.Secondly,in terms of financial management,it should optimize the debt structure,strictly control its own debt ratio and timely adjust the debt structure.(2)All credit evaluation institutions should further improve their professional level and sense of responsibility,constantly innovate credit evaluation means according to the actual problems of enterprises,and improve the evaluation mechanism of credit institutions to lead the healthy development of the bond market.(3)For external financial regulatory organizations,the supervision of bond issuers and credit evaluation institutions should be strictly strengthened at the same time.Through systematic and comprehensive analysis,it is conducive for bond issuing enterprises to take this as a reference,adopt reasonable strategies,standardize investment and business behavior,timely improve the structure of assets and liabilities,improve asset quality,optimize the overall structure,timely avoid financial difficulties and bond default,and promote the sustainable development of automobile manufacturing industry. |