Research On The Default Risk Of Bonds Of Yango Group Based On KMV Model

Since the resumption of bond issuance in China in 1981,the bond market has undergone rapid development and played an increasingly prominent role in national economic construction.However,rapid development has also triggered crises.In 2014,China’s first bond default broke the characteristic of "rigid redemption",followed by frequent incidents of corporate bond default,which had a great destructive effect on the economic and social order.Among the defaulting entities of bonds,the real estate industry is the main sector,which has deepened the attention of the market and investors to real estate enterprises.It is urgent to propose risk prevention measures.In this context,this article takes the Sunshine City bond default event as the research object.By reviewing domestic and foreign literature,a preliminary understanding of bond default is formed.Then,based on the basic situation of Sunshine City and the analysis of bond default events,the reasons are analyzed,and the following conclusion is drawn: from a macro perspective,it is mainly affected by economic downward pressure and policy regulation constraints.However,external factors may only accelerate corporate bond defaults,and the true cause of bond defaults lies with the enterprise itself.Therefore,in-depth analysis of the enterprise reveals that the influencing factors include:(1)high leverage operational risk;(2)The maturity time of bonds is concentrated;(3)Risk of shareholder reduction and weakened profitability;(4)Tight cash flow and increased liquidity risk;(5)High proportion of guarantees and equity pledges;(6)Frequent changes in management and other factors can be detrimental to internal stability of the enterprise.The two-way pressure from external and internal reasons prevented Sunshine City Group from responding in a timely manner,ultimately leading to a bond default.Then based on the revised KMV risk warning model,the results show that the credit risk of Sunshine City began to rise in the third quarter of 2020,indicating that the model has good risk warning ability and provides good warning performance for the future.Finally,through the analysis of the causes of default and risk warning,the following inspirations were obtained:(1)Enterprises should adapt to the economic situation and adjust their development strategies in a timely manner;(2)To control the scale of liabilities,pay attention to the maturity of debts,and optimize the structure of assets and liabilities;(3)To improve the internal governance structure,having an excellent and stable management team can play a role in stabilizing the "military morale";(4)Develop a risk warning mechanism and take effective preventive measures as soon as possible.