Research On The Early Warning Index System Of Enterprise Bond Default In China

Ever since "11 ChaoRi" bondcould not pay its interest on March 4 2014,the credit risk of bond defaults has erupted.The number and the amount ofdefaulted bonds are large,as involving enterprises wide.It covered almost all kinds of bond,such as private bonds,corporate bonds,medium-term notes,privatepublication notes.The issuers included not only private enterprises and public enterprises,but also state-owned enterprises and central enterprises.In terms of industry,defaulted bonds were mainly from steel,energy,materials,machinery sectors which are volatile and cyclical and some less profitable business sectors.For a time,the participants of the bond market were scared and the investors lost a lot.For the purpose of protecting investors and improving investors' risk awareness,this paper studies the warning index system of enterprise bond,and puts forward some suggestions for investors to avoid default risk.This paper mainly includes three parts.First of all,it analysesthe present situationof Chinese bond market and bond default.Secondly,on the basis of literature review,it analyses the reasons for bond defaults and establishes a bond default warning index system from investors' aspect.It studies a case in order to verify the model.Finally,it puts some suggestions to protect investors' rights and interests.The first part is the status quo of the bond market and bond default of China.It analyses the basic legal framework and basic types of bonds in China,describes Chinese bond market structure and the current situation.It analyses the characteristics of default bonds over the past 4 years from the year of occurrence,the default amount,industry,region and other dimensions.Investors' compensation approaches and successful cases after bond default are briefly discussed.Model building and empirical research,it analyses the reasons forbond default.Using 0-4 score method to determine the weight,it establishes a bond default warning index system from investors' aspect,thenit uses a corporate bond as an empirical case study to verify the applicability of the model.Finally,itputs forward some suggestions for investors to avoid and handle default risk in the process of investing.