A Case Study On Bond Default Of Oceanwide Holdings

In 2022,the total issuance scale of various bonds in China’s bond market will reach 61.45 trillion yuan.As the second largest bond market in the world,China’s bond market has occupied a very important position in the social economy.However,during 2014-2022,1015 bonds in China’s bond market defaulted,with a total amount of 918.575 billion yuan.There were 228 enterprises involved in the issuance of bonds,and 57 listed compa nies had bond defaults,accounting for a large proportion.However,due to the late start of the development of bonds in China,the current domestic research on issues related to bond default is also not mature.In order to conduct in-depth research on the issues related to bond defaults of listed companies in China,this article selects Oceanwide Holdings Co.,Ltd.(referred to as "Oceanwide Holdings" in this article)listed on the Shenzhen Stock Exchange as the research object for specific case analysis.When reviewing the company status information of Oceanwide Holdings,this article found that the company’s main business is concentrated in the real estate and financial industries,and its controlling shareholder is China Oceanwide Holdings Group Co.,Ltd.The relationship between Oceanwide Holdings and the internal companies of the "Oceanwide Series" group is complex and closely connected.This article also summarizes the information on the defaulting bonds of Oceanwide Holdings and finds that a total of 8 domestic bonds of the company have experienced material defaults from the end of August 2021 to the end of January 2023,namely "18 Oceanwide MTN001","17 Oceanwide MTN001","18 Oceanwide 01","19 Oceanwide 02","20 Oceanwide 02","20 Oceanwide 03","19 Oceanwide 01",and "20 Oceanwide 01".Subsequently,this article conducted a detailed analysis of the causes of Oceanwide Holdings’ bond defaults,and found that the company’s bond defaults were the result of a combination of internal and external factors.The external causes of the company’s bond default mainly include macroeconomic downturn,the impact of the epidemic,and changes in industry policies;The internal causes include high sensitivity of the main business to changes in the industry environment,internal risk transmission within the group,agg ressive expansion and excessive borrowing of the company itself,and a worrying and deteriorating financial situation.Among them,when analyzing the financial situation in the internal causes,this article first used the Z-Score model to comprehensively evaluate the overall financial risk of Oceanwide Holdings.It was found that its Z-value from 2014 to 2021 was far from the interval endpoint of 1.81 and showed a continuous decreasing trend.This proves that the overall financial risk of Oceanwide Holdings continued to increase after the start of business transformation in 2014,until it began to erupt in 2021;Subsequently,this article conducted a specific analysis of the various financial capabilities of Oceanwide Holdings,and found that its profitability,operating ability,debt repayment ability,etc.have decreased since 2014,and its financial leverage has been consistently high.Finally,after analyzing the causes of bond defaults by Oceanwide Holdings,this article proposes various governance suggestions for Oceanwide Holdings and provides case study insights for other entities(such as other listed companies,investors,intermediaries,and regulators).