A Case Analysis Of Listed Corporate Bond Default In China Based On Kaidi Ecological And Environmental Technology Co.,Ltd

In recent years,the bond market has played an increasingly important role in the financial markets.The most of companies,especially listed companies,raise funds by issuing bonds in China.As the economic growth slows,the potential credit risk of the Chinese bond market is gradually exposed.Since the first bond default in 2014,many new companies that include listed companies have been defaulting.A number of listed companies have failed to repay interest on time,which has seriously affected the normal operation of the bond market and dampened the enthusiasm and confidence of investors.Under this circumstance,it is very important to analyze the reasons of bond default and reduce the risk of bond default.This paper takes Kaidi Eco,a leading enterprise in the domestic biomass power generation industry,as the research object,and elaborates and analyzes from the four modules of case background,case data,case analysis and risk measurement.Firstly,the introduction part expounds the research background,research significance,the content arrangement and the innovations and shortcomings of this paper.Then the first part summarizes the overall situation of bond default in China and the status of credit rating.The second part reviews the default event of Kaidi Eco Bond.The third part analyzes from the macro level,industry level and company level to explore the deep reasons of the bond default of Kaidi Eco.The fourth part measures the default risk of Kaidi Eco through Z value model and KMV model,and compares the default reasons and default risk with the credit rating report to find out the deficiencies of the credit rating.Finally it summarizes the problems exposed in the default event of Kaidi Eco and makes relevant recommendations.Through in-depth analysis of the bond default event of Kaidi Eco,the following conclusions have been drawn: First,there are multiple reasons for the default of the Kaidi Eco.The macro level includes the continued economic downturn and regulatory division;the industry level includes the shortage of upstream raw materials,fierce competition among midstream power generation companies,the strength of downstream power purchase companies and policy fluctuations;the company level includes frequent connected transactions,blind acquisitions,loss of financing capacity and frequent changes in senior management.Financial indicators show that profitability,operational capacity and solvency of Kaidi Eco have all dropped significantly in 2017.Income of Kaidi Eco which has had a tough time has not metthe cost.Second,credit ratings have some shortcomings.The calculation results of Z value model and the KMV model show that the default risk of Kaidi Eco reached the maximum in 2017.However,due to poor independence,inaccurate corporate information and inadequate rating procedures,rating agencies have given a high credit rating.At the same time,comparing the reasons of the default with credit rating indicators,it finds that the credit rating should pay attention to the impact of various non-financial factors such as macro environment,industry environment,company operation and management which influence the default risk of Kaidi Eco.Based on the above conclusions,this paper puts forward relevant suggestions from macro aspect,industry aspect,company aspect and credit rating aspect to reduce bond default risk and ensure the healthy development of bond market.