Case Study On Default Of Tianwei Group Bonds

Bond default is the normal state of capital market,and debt default rate has a very obvious relationship with the law of economic fluctuation.As the third largest bond market in the world,China's credit debt has expanded rapidly in recent years,but there is no debt default before 2014.In fact,because of the existence of implicit guarantee of "rigid payment",Chinese enterprises,especially state-owned enterprises,have never defaulted on their debts.Although there have been a series of bond default risk events in 2012,they have finally been paid due to the "bottom" by the government and banks.These events strengthen investors' psychological expectations of "rigid payment",make them ignore the credit risk of the bond market,which is very harmful to the healthy and long-term development of the bond market.With China's economic development entering a "new normal",in the context of economic growth shifting and industrial restructuring,Economic downward pressure is increasing.In the boom period,the operational risk and financial risk are hard to hide.The increase of debt volume after the expansion of bonds also pushes the debt risk to the top of the wind,especially in the industries with excess capacity.Credit risk deserves more attention.Since 2016,there have been many bond defaults in China's bond market.The credit risk of bonds has been gradually enlarged,and the "new normal" of the bond market has emerged,which has brought a great impact on the legitimate rights and interests of debtors and the stability of the whole market.Taking Baoding Tianwei Group's bond default as an example,this paper analyses the causes of bond default from three aspects: macro,medium and micro,and obtains corresponding enlightenment and suggestions.This case includes the common failures of most overcapacity enterprises in China,the problems encountered by state-owned enterprises in dealing with defaults,and at the same time,Tianwei Group itself has something worthy of our further study.Firstly,the process of issuing and defaulting Tianwei Group's bonds is introduced in detail.Secondly,the reasons of defaulting Tianwei Group's bonds are analyzed from the perspective of the enterprise's own operation,including the company's financial situation and ownership structure.Finally,on the basis of the reasons for Tianwei Group's default,we get the corresponding inspiration and suggestions,and get some innovation in the method.We propose that enterprises should choose the appropriate "time to enter the market" and sound development mode,and build a risk early warning system for corporate bond default,pay attention to the abnormal financial indicators of industries with excess capacity,and obtain the disposal scheme of local state-owned enterprise bond default as well.The enlightenment of market supervision can provide some reference for the inter-bank bond issuing enterprises and other relevant participants in the bond market.