| In recent years,the bond market has entered a stage of rapid development,product innovation is rapid,system updating is accelerated,the scale of bond issuance continues to expand,and the market activity is steadily improving.By the end of September 2019,the total stock of China’s bond market reached 94.09 trillion yuan,almost equal to the total GDP of China,making it the world’s second largest bond market after the United States.The rapid growth of the bond market has boosted social and economic development while providing more financing channels for different enterprises.However,since 2013,under the background of "three periods of superposition",the downward pressure on the economy continued to increase,and the domestic and foreign environment became increasingly severe,and the bond risk continued to accumulate.On March 4,2014,"11 Chaorv bond" became the first domestic defaulting publicly issued bond,breaking the rigid payment situation of our bond,and pulling a new curtain for the domestic bond market.With the continuous expansion of the issuance scale of the bond market itself,the credit qualification of the issuers declines,bond default events occur frequently,and the default risk continues to expand.Large-scale default events not only bring economic losses to investors and increase the difficulty of issuers’ refinancing,but also have an impact on the whole bond market and macroeconomic environment.Therefore,how to reduce the cost of corporate debt,prevent and resolve systemic business risks has become a key issue that needs to be paid attention to on the road of stable development of our economy.As of Dec 31,2022,a total of 529 bonds in China’s bond market had materially defaulted,involving 154 private enterprises and 42 central and local state-owned enterprises.Due to the lack of implicit endorsement from the government,private enterprises have significantly lower risk resistance ability than state-owned enterprises in the face of deteriorating external environment,and both default scale and default amount are significantly higher than state-owned enterprises.From the perspective of development space,under the demand of China’s super-scale market,private economy has huge development opportunities in the development of new fields and new tracks.Based on the above background,this paper reviews the time trend,variety distribution,main property distribution,industry distribution and regional distribution of the current situation of bond defaults in our country first,and selects private enterprises as the research object.In terms of case selection,this paper takes Wuhan Contemporary Technology Industry Group Co.,Ltd.as an example to discuss the reasons why Contemporary Group,as one of the largest private enterprises in Wuhan,downgraded its credit rating from AA+ to C and suffered several bond defaults in 2022.After reviewing the history of bond default of contemporary Group,this paper analyzes the external influencing factors of bond default from three aspects:macro economy,financing environment and epidemic impact,and analyzes the internal influencing factors of bond default from three aspects:expansion strategy,corporate governance and financial reasons.It is found that poor external environment,aggressive expansion strategy,inadequate corporate management and other reasons lead to the bond default of contemporary groups.Finally,in view of the causes of bond default of contemporary Group,this paper gives the following suggestions:first,clarify the enterprise’s own market positioning,pay attention to the industry environment and development trend,rationally plan the company’s development strategy,timely adjust the financing strategy,and regularly update the financing plan;Second,improve the company’s management system,strengthen interbal control,standardize the examination and approval system,increase punishment,increase the cost of violations;Third,establish an effective bond default early warning mechanism,so that enterprises can detect potential financial risks in time and avoid bond default. |
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