Trigger Judgment And Effect Analysis Of Cross Default Clauses Of Credit Bonds

Since the break of the "rigid payment" in the bond market,the default risk of China’s bond market has been released.The number of bond defaulters and default amounts has been increasing year by year,and a number of bond issuers have been in continuous default,which accelerates the process of the cross-default clauses embedded in the bond market.In October 2017,yiyang group triggered the cross-default clause of corporate bonds due to the dispute over the transfer of creditor’s rights.Subsequently,the first cross-default clause of corporate bonds was determined in China.On July 5,2018,yongtai energy defaulted on its bonds,and nine of its bonds were judged to be in cross-default,involving an amount of 8.3billion yuan.Two cases provided case support for the study of cross-default clauses of bonds.Based on previous theoretical research,and analyzes the cross terms of default influence on bond default recovery rate,combining with the case,further explore cross default clause trigger decision and triggered effects in practical application,the full text,the following conclusions:cross default triggers the judgement and the effect is different in different bond market,can be determined cross default depends on the bondholder meeting voting;At present,China’s lagging financial infrastructure construction has affected the actual effect of cross default clauses.Cross default clause will aggravate the debt crisis of the issuing entity and further affect the production and operation of its related parties.It isdifficult to identify the cross default in the case of direct debt default.Some Suggestions are put forward to improve the application of cross default clauses.