Case Study On Bond Default Of "16 Huge 03"

In March 2014,the interest of the current period of "11-day bond" could not be In March 2014,the interest of the current period of "11-day bond" could not be paid in full on schedule on the original coupon date,which resulted in material default,which broke the existing rigid payment situation in China’s bond market.Affected by the slowdown of economic growth and the adjustment of industrial structure,the downward pressure on China’s economy is increasing,leading to frequent bond defaults.The bond default event in 2018 is a blowout.According to the statistics of Wind database,the number of defaulters,the number of defaulted bonds and the amount involved are far higher than previous years.A total of 125 bonds,totaling120.961 billion yuan,defaulted during the year.As of July 31,2019,a total of 314 bonds have defaulted,involving 115 issuers,of which 98 bonds have defaulted in2019,involving 47 companies,with a default amount of 54.885 billion yuan.Based on the above background,this paper adopts literature research,comparative analysis,qualitative analysis and quantitative analysis,and takes "16huge 03" corporate bonds as an example to study the reasons for bond default and the change of credit risk of da da group,thus drawing a general conclusion and putting forward corresponding Suggestions.Firstly,this paper gives a basic introduction to the case,and then describes and analyzes the general situation of da da group,the bond issuance since the listing,the bond default process and the disposal after the default,laying a foundation for the following case analysis.Secondly,combining with the case,from a macroeconomic,industry characteristics,and analyzes the internal level "16huge 03" default reasons,besides using modified Z-score model and the modified KMV model for the large group from the listed to the third quarter of 2019 changes in credit risk measurement,and compared with the agencies risk rating for bonds.Finally,based on the case analysis above,this paper provides Suggestions on how to improve the bond market environment and reduce the risk of bond investment from the perspectives of regulation,credit rating,issuers and investors.In this paper,the main conclusions are as follows: first,the bond defaults by macro environment deterioration,industry into the major effect of the downward phase and industry policy change,the company’s own business conditions is the keyto whether debt default,therefore,the company should choose the appropriate strategic objectives,strengthen internal operation management,expand the financing channels,prepared to cope with the industry management risk in advance;Second,the z-score value measured by the modified z-score model can predict the change of risk in advance.When it is on a downward trend or starts to be less than the critical value,issuers and investors should pay more attention to the company.By using the modified KMV model,the default distance and default probability of the company can reflect the changes of the company’s credit risk more quickly and sensitively.Thirdly,there are many official regulators in the bond market,and there is regulatory overlap and vacuum.At the same time,investors’ risk identification ability is insufficient,and rating companies,as intermediaries,are also fake and lag rating.Therefore,it is very important to improve the regulatory system,information disclosure system and credit rating methods.