Research On The Causes, Effects, And Countermeasures Of Bond Default Of YanGo Group

The bond market is an important component of the financial market,providing opportunities for corporate financing,among which corporate bonds are the preferred financing method for real estate enterprises in China.Since the default of the "11CHAO RI" in 2014,companies have frequently experienced bond defaults,with the real estate industry bearing the brunt.The number and amount of bond defaults remain high.In recent years,macroeconomic fluctuations have been significant,uncertainty has surged,and market risks have continued to ferment.Some real estate enterprises have been affected and have encountered difficulties in capital turnover,accelerating their own risk exposure,and leading to credit events.This article takes the bond default event of Yan Go Group as a research case to analyze the causes and impacts of its bond default.The causes of bond default of Yan Go Group can be analyzed from three levels: macro,industry,and company.From a macro level perspective,in the context of macroeconomic downturn,the operating environment of the enterprise has deteriorated,the financing environment is tightening,and Yan Go Group’s real estate business has been greatly impacted;From an industry perspective,the prosperity of the real estate industry has declined and industry policies have continued to tighten.Yan Go Group is greatly affected by regulatory policies and financing is restricted;From the perspective of the company itself,Yan Go Group’s highly leveraged and aggressive expansion strategy is extremely unreasonable.In the early stages,there was short-sighted behavior when issuing bonds,resulting in its high financial leverage and poor debt structure,and the company’s weak risk resistance ability.When the internal and external environment changes,its profitability continues to decline,its operational ability weakens,and its solvency is insufficient,ultimately leading to bond defaults.This article measures and analyzes the credit risk of Yan Go Group based on the "F-socre model" and "KMV model".It is found that the default risk of Yan Go Group continues to increase,which can better confirm the viewpoint of the previous analysis on the causes of default.The impact of bond defaults by Yan Go Group can be discussed from three perspectives: the impact on the company itself is mainly reflected in the decline of the company’s stock price,the continuous downward adjustment of the company’s credit rating,the decline of the company’s market reputation,and the company’s operation falling into a vicious cycle;For the bond market,the occurrence of bond default events has a certain impact on the bond market,and market entities will continue to pay attention to the credit risk issues of bond issuers in the real estate industry;For investors,this incident seriously damaged their interests and suppressed their investment confidence and willingness.Based on the analysis of the causes and impacts of default on Yan Go Group bonds in the previous text,this article believes that Yan Go Group has not reached the level of bankruptcy and has not passively evaded or abandoned bonds from the perspective of the actual operating situation of Yan Go Group and the company’s subjective willingness to repay debts.Therefore,this article proposes four countermeasures and suggestions for the post default disposal of Yan Go Group bonds: firstly,Yan Go Group can choose to sell its holding subsidiaries and their land assets located in non key development or even merger development areas of the company in recent years,which are less related to its main business,to supplement the company’s liquidity;Secondly,negotiate with creditors to modify payment conditions;Thirdly,seek financial assistance from relevant financial institutions;Fourthly,establish a special relief fund in cooperation with financial management companies.Finally,based on this case study,this article extends and summarizes case insights from three aspects: issuers,regulatory agencies,and investors.For bond issuers,enterprises should adjust their strategies rationally based on the internal and external environment,determine an appropriate debt scale,and optimize the financing term structure.If a credit event occurs,it is necessary to ensure the normal operation of the company and actively promote the formation and implementation of disposal plans;For regulatory agencies,they should further improve their information disclosure system,reduce the occurrence of credit events,and strengthen supervision and punishment of defaulting bond issuers;For investors,they should enhance their awareness of investment risk management,continue to pay attention to bond issuers,and choose diversified investment methods to diversify investment risks.And investors should actively safeguard their own interests and can negotiate with each other to jointly protect their rights.