Credit Analysis On CHAORISOLAR Co.,LTD

On March 4, 2014, Shanghai Chaori Solar Energy Science &Technology Co.,Ltd published 《the notice of the 2011 corporate bonds of the second phase of the full payment of interest cannot be scheduled》, “11 super bond” interest on this issue would not be on scheduled payment date on March 7, 2014 in full, only to pay a total of 4 million yuan, which means that “11 Super bond” was default.The principal credit and bond credit were AA when the launch of the “11 super bond”,but after only a few months, the company was reported large losses and the news of the liquidity squeezed. Such a high credit rating of bond release occurred a series of problems that it had to make one think. As maternal, Chaori solar bonds was listed on the Shenzhen Stock Exchange in November 2010, the company’s super funds raised $ 1 billion, then why is the company still issuing bonds after it was listing one year? Chaori Solar Energy Science&Technology Co.,Ltd was mass and blind expansion, just appeared in the PV industry recession stage, overcapacity in industry and significant changes in the external environment,contributing to huge losses. So, what are the cause of the loss and what factors led to its liquidity crisis caused by its bond default?Because of the phenomenon of zero default on the bond market in our country that sends the wrong signal to investors, investors became no aware of public debt was going to default,creating investment value of China’s bond market distortions. Not only “11 super bond” can shake the thought of defaults, but also prompted the return of investors ’ risk awareness.Based on Chaori Solar Energy Science &Technology Co.,Ltd as a case, this paper analyses the background of the company to issue bonds and after the issuing the company itself as well as changes in the business environment by mining information in advance,trying to find out some reasons can lead to the losses, and provide some advises for investors to assess bond risk. Through the company and industry level analysis of credit risk and lists information focused on financial and risk early-warning event.