A Case Study On Bond Default Of Yango Group

With the rapid development of China’s bond market,the scale of the bond market continues to expand.China’s bond market has become the second largest bond market in the world,and bond financing has become an important way of financing in China’s capital market.At the same time,credit risk has gradually become prominent.On March 4,2014,the "11 Super Day Bond" was unable to pay interest on time,breaking the rigid payment practice of credit bonds in China.Since then,bond default events have occurred frequently,with defaults showing a generalized and normalized characteristics.Bond default issues have spread to various industries and fields.Since the first real estate industry bond default occurred in 2018,the default of real estate corporate bonds has become increasingly severe.The real estate industry ranks first in terms of cumulative default entities and the number of bond defaults,and gradually evolves towards medium to large real estate enterprises.Yango Group Co.,Ltd.is a leading real estate enterprise with a total strength of 100 billion yuan,ranking among the top 15 real estate companies in China.Selecting Yango Group’s bond default event as the research object,on the one hand,it has attracted widespread market attention due to its being the real estate enterprise with the highest number of bond defaults and default amounts in 2022.On the other hand,the comprehensive strength of Yango Group is strong and representative.Based on the above background,this article first introduces a case of this default event,including the company’s basic situation,bond issuance situation,the process of bond default,and the subsequent progress of default.Secondly,using comparative analysis,financial data analysis,and a combination of qualitative and quantitative analysis methods,an in-depth study was conducted on the causes of default of Yango Group.It was found that external factors leading to the company’s default mainly include macroeconomic downturn and policy tightening in the real estate industry.Internal factors at the company level include an increase in the company’s debt scale due to aggressive expansion strategies,high equity pledge and guarantee ratios,and an unreasonable debt maturity structure There are deficiencies in corporate governance and other issues in business management,manifested in financial conditions such as declining profitability,worrying debt repayment ability,insufficient operational capacity,and tight cash flow.Once again,using the KMV model to measure the default risk of a company can play a certain risk warning role.Finally,the inspiration for preventing bond defaults is formed through this bond default event:the inspiration for bond issuing enterprises includes formulating reasonable business strategies,optimizing debt maturity structure,and enhancing corporate governance capabilities;The inspiration for the bond market includes strengthening information disclosure supervision and improving the construction of credit rating systems;The inspiration for investors includes enhancing investment risk prevention awareness and strengthening investment follow-up management.In order to enhance the risk prevention level for bond default issues and assist in the healthy and orderly development of the bond market.