Causes Of Corporate Bond Default And Financial Warning

Before 2014,there has never been a bond default event in China's bond market,so "rigid payment" has always been the consensus of investors.The myth of which there is no credit risk in China's bond market has been broken,marked by the incomplete payment of "11 Chaori bonds" on March,2014.Under the complex international circumstance,China's economy stepped into a "new normal".With the supply side of structural reform in the whole advancement and the strong implementation of the three crucial strategies,and the downside risks to economic growth,domestic transmission of financial regulation increases enterprise financing risk,bond marketization process speeds up,the prelude to bond defaults began.Recent studies have shown that bond default is the result of a combination of variety factors.These factors include the global economic recession,the sharp decline in the industry prosperity,the refinancing difficulties caused by the financial deleveraging,the poor operation and the decline of profitability caused by the blind expansion of companies.Bond default is closely related to the cyclical fluctuation of economy and industry.After the financial crisis in 2008,the global economic growth and development were weak,and China's bond default happened under the background of weak global economic recovery.In order to guide the healthy and orderly development of the bond market,reduce the impact of systemic risk,explore the causes of bond default and build a financial risk warning plan based on this is an urgent task.For investors,it is necessary to break the investment concept of "rigid payment" and establish risk management awareness so as to effectively identify risks and protect individual rights and interests.This paper elaborates on the significance of studying corporate bond default and financial early warning under the current macro-economic background in China,and on the basis of full retrieval of relevant domestic and foreign literature,discusses the causes of corporate bond default from the macroscopic,industrial and corporate levels.Introduce the theory and method of financial early warning;From the example of Chuying Agro-Pastoral Group bond defaults to study and analyze the cause of bond default.Using Logistic model,one of the financial early warning model for Chuying Agro-Pastoral Group and other 30 companies which appeared bond default in 2018.Using its financial data in 2017 to conduct the risk prediction;thus to reveal corporate bond default risk for the operators,investors and regulators and constructed bond finance risk early warning system.At last,the paper puts forward some relative suggestions for investor of supervision,credit rating on how to strengthen investor protection and lead investors to establish risk management awareness.