A Research On The Reasons For The Default Of Listed Company Bonds And The Market Response

The bond market is an important part of China ’s capital market.Since the issuance of corporate bonds has been expanded in 2015,the issuance threshold has been reduced,and tens of thousands of bonds have poured into the market at one time.Its scale reached its peak.On the one hand,this has greatly promoted the new development of the bond market.On the other hand,a large part of bonds have ushered in the wave of maturity and repurchase since 2018.However,as China’s economic development has begun to enter the "new normal",and the introduction of deleveraging policies,the downward pressure on China’s economy has been greatly increased,the industry’s development has been restricted,and many companies face the risk of debt repayment In the end,a substantial breach of the contract occurred.The phenomenon of "normalization of default" has begun to appear in the bond market,and the scope of the bond default wave has gradually expanded.Therefore,it is the problem that this article wants to investigate to explore the essential causes of bond defaults,reduce the occurrence of default events at the root,and promote the healthy and stable development of the bond market.This article takes the default event of Jinhong Holdings’ "15 Jinhong Debt" as the research object,discusses and studies the causes of bond defaults,and tries to put forward relevant suggestions for the analysis of this case.This article first summarizes the characteristics of corporate bond defaults in China,then introduces the basic situation of Jinhong Holdings on the theoretical basis of excessive investment,related party transactions,financial distress,etc.,and then reviews the default process of "15 Jinhong debt" and the follow-up influences.Then analyze the reasons for breach of contract.This part analyzes the background and conditions of the breach policy and the internal reasons of the company.Among them,the policy background and condition levels are divided into two dimensions: the macro financial environment and the industry background.The internal reasons are focused on financial factors and non-financial factors.The Z-Score model is used to violate the company ’s financial situation,and the risk was verified.Subsequently,the event research method was used to analyze the impact of Jinhong Holdings’ default on the stock market,and the shortterm market response and long-term stock price fluctuations were analyzed to verify that the bond market and the stock market are linked.Finally,the analysis concluded that the default of Jinhong Holdings has a greater relationship with the macroeconomic downturn and the harsh industry survival environment,and it is more closely related to the company’s aggressive investment strategy and unreasonable debt maturity structure..And put forward relevant suggestions to the related parties involved.