| China’s bond market started late in the 1980 s,and developed rapidly after2004,while the bond default occurred in 2014.Since the fixed amount of government bond payments has been broken,the amount of the debt default and the amount of the breach has been increasing year by year.Before 2018,most of the enterprises that defaulted on their debt were enterprises with excess capacity,of which private enterprises were greatly affected by the economic downturn,including equipment manufacturing and steel industry.Since 2018,state-owned enterprises have also defaulted on their debts,with increasing debt defaults in high-rated industries such as real estate and construction.Large real estate enterprises are characterized by a high leverage ratio and a large asset scale,and their debt default will seriously affect the upstream and downstream industries,investors and consumers.The new crown epidemic in early 2020 posed a huge challenge to all sectors of the country,especially the real estate industry.In early October 2021,a $206 million outstanding note was due and not paid on the same day,constituting a material default.This has also become a domestic housing enterprises border foreign debt default of a beginning.Before this our country enterprise,due to overseas bond default violence thunder enterprise is not common,the paper hopes that through multiple angles analysis of the causes of debt default,and pattern group debt default lead to enterprise itself,the real estate industry,bond investors,issuers and intermediaries,and from the perspective of enterprises,investors and regulators three give countermeasures and Suggestions.This paper analyzes the causes and consequences of the debt default of the Fantasia Holdings Group by using the case study method,literature research method,and event analysis method,and draws relevant conclusions and insights.Specifically,the article compares the literature on the causes and consequences of debt defaults over the years,and introduces the development and operation of the Fantasia Holdings Group,the existing bonds and the default process.On this basis,the article analyzes the internal causes and external factors of debt defaults.Among them,the internal reasons include the company’s overly aggressive investment strategy,unreasonable financing strategy,declining profitability,low debt servicing capacity and unsatisfactory operating capacity;the external factors include the impact of the new crown epidemic,the adjustment of national policies,the tightening of real estate credit,and the deterioration of the industry environment.Finally,the article reveals the negative impact of the debt default on the Fantasia Holdings Group,investors,issuers,intermediaries and the real estate industry,causing a decline in its market value,deterioration of its financial condition,damage to its corporate reputation and increased difficulty in refinancing.By analyzing the causes and consequences of debt default,the paper draws the enlightenment: in the context of a downward macroeconomic environment and deleveraging,tighter market surveillance,decreased risk appetite and increased financing difficulty have increased the risk of corporate debt default.For businesses,In the investment expansion,they should consider their own situation,forge ahead,To reduce the risk of corporate debt default,Consolidate core business,enhance core competitive power,Make timely adjustments according to market changes,Improve Corporate Internal Management Mechanism;For the regulators,While strengthening accountability and warning the majority of debtors,Supervision should be strengthened,Enhance the publication of information,decrease the asymmetric information;Rating agencies to follow up immediately after finding problems,While playing a supervisory role as much as possible,Improve the professionalism and timeliness;For the investors,In the unpredictable market,Maintain the professionalism and rationality,Need to have a certain risk identification ability,This helps to reduce the investment risk. |
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