Case Study Of Yinyi Bonds Default

According to the bank for international settlements,China's bond market stock reached 96.23 trillion yuan at the end of 2019,15.78 percent higher than 2018,second only to the United States.Since the breaking of rigid payment in China,the first bond default event occurred in China in 2014.Subsequently,the default event occurred one after another,and the large-scale default accelerated the exposure of credit risk in the bond market.In 2018 alone,120 bonds defaulted,more than the total default amount in the four years from 2014 to 2017,reaching 117.651 billion yuan.Repeated defaults have had multiple effects.For enterprises,default will raise their financing cost;For investors,default will not only bring economic losses but also reduce their investment willingness;For the entire bond market,a large-scale default would increase the credit risk and reduce the financing function of the market.Therefore,the study of bond default is particularly important.By sorting out the bond defaults in recent years,the author finds that under the influence of the domestic economic downturn and the deleveraging policy,the listed private enterprises have become the "heavy disaster area" for bond defaults.On December 24,2018,yinyi stock issued a notice that it was unable to repay the credit bonds issued earlier by the company as scheduled,"1.5yinyi 01",which constituted a material default and caused the first bond default of a real estate company in China.This paper takes the default of yinyi stock bond as a case,takes "1.5yinyi 01" as the focal point,combs its default process,and then introduces and analyzes its default consequences,default reasons and default disposal.Article adopts the method of top-down analysis,from the macro level,industry level and company internal factor three aspects to analyze the reasons of default,found that: at the macro level,to leverage policies,inverse globalization makes the main capital market into "rate increases and capital market downturn worsened enterprise financing environment;At the industry level,the highly leveraged operation mode of real estate enterprises,the downward trend of the real estate market and the rising financing cost of real estate enterprises increase the possibility of default.At the corporate level,the fundamental causes of corporate bond default are the poor financial condition of the company,which leads to the tightening of liquidity,the high equity pledge,which leads to the high financing risk of the company,the overly aggressive corporate strategy and incomplete corporate governance.Finally,in view of these problems,put forward relevant countermeasures,in the macro level should be: 1.Differentiated deleveraging.2.Alleviate the financing difficulties of private enterprises.3.Improve the bonddefault disposal mechanism.At the company level,it should: 1.Improve the company's risk control level and corporate governance.2.Improve profitability and financial position.3.Use reasonable financing methods.It is hoped that these studies in this paper can provide some reference for other real estate companies and even all private enterprises in the aspects of rational debt financing and strengthening market supervision.