| In the past several years,China's bond market has developed rapidly.The bond market size has grown rapidly,and the functions of serving the real economy have been further enhanced.In 2018,the bond market expanded steadily,issuing nearly 44 trillion yuan of various types of bonds,which provided a strong financial guarantee for the smooth implementation of fiscal policy and the smooth progress of major national projects,and also created favorable conditions for promoting the social and economic development of various regions and resolving the debt risks of local governments.However,with the development of the market,bond default has gradually become normal state.Before 2014,there was no substantial bond defaults in China's bond market.The default of “11 Chao Ri Bond” broke this situation.Since then,the number of bond defaults is on the rise.In 2018,the condition about bond defaults was more serious.A lot of bonds matured and highly concentrated.The number of default bonds was much more than before,with 126 bonds defaulting,amounting to 99.347 billion yuan.From the variety of default bonds,almost all types of bonds issued by non-financial companies defaulted,covering nearly all types of enterprises.The impact of the bond defaults is also related with every respect of the economy.For enterprises,it will raise the financing cost of the bond issuer and affect the business activities of the entity of the default bond;for investors,it will bring economic losses and reduce their willingness to invest;for the bond market,it will increase credit risk,affect its financing function.Therefore,it is necessary to study on this issue.Wintime Energy is a private coal giant listed on A-share.On July 5,2018,Wintime Energy failed to pay the principal and its interest of 17 Wintime Energy CP004,the fourth short-term financing bond in 2017,which constituted a substantial breach of contract.This is the first substantial default of AA+ bonds in China,and its bond default has caused widespread concern in the capital market.Meanwhile,It triggered a cross-protection clause of 13 other bonds,with a total principal of 9.93 billion yuan.In addition,the bond default has affected dozens of banks,trusts and leasing companies with a wide range influence.Based on the theory of financial crisis,this paper specifically analyses the causes of bond defaults of Wintime Energy.I make an analysis from the four aspects that caused the bond defaults: the business strategy,profitability,financial situation,and refinance.Specifically,Affected by the coal industry depression,Wintime Energy blindly diversified during the transition process,and expanded too fast,laying a hidden danger for bond defaults.In terms of financial status,the short-term debt burden is heavy,and the decline of power sector's gross profit rate.It is impossible for Wintime to repay debts through its own capabilities,owning to the lack of cash flow and weak asset liquidity.In addition,because the external financing conditions have deteriorated since 2018,its weakened ability to refinance is the trigger of the defaults.Finally,the corresponding suggestions are drawn from the above reasons.Enterprises should formulate realistic strategic objectives,improve their profitability and financial situation,and rationally make use of financing means. |
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