Research On The Influence Of Cash Flow,Liabilities And Enterprise Nature On The Default Probability Of Credit Bond

Since the issuance of the first corporate bonds in 1983,the stock of credit bonds has reached 25 trillion,and the sort of bonds has increased to 19.With the support of policies,the credit bond market is still developing rapidly.At the same time,credit risk is also expanding dramatically.From March 5,2014 to December 31,2018,there were 326 defaults in China,involving a total amount of 244.512 billion,and the occurrence of bond defaults gradually gathered in listed companies or high-grade bonds.According to the research department and market view,China's economy is still under great downward pressure in 2019.In addition,bond repayment will usher in a peak period.Thus the research is very important.This paper first analyzes the status quo of credit bond default from the credit bond market and the issue rate.Secondly,all the default parties of bonds before December 31,2018 were selected as research objects.The control group was set up according to the industry of the enterprise.The logistic model was used to empirically analyze the relationship between the selected indicators and the bond default probability.The following conclusions were obtained:The cash flow of enterprise operation,investment and financing activities has a significant negative impact on the default probability of enterprise bonds,and enterprises should take free cash flow as the core as the most important reference for operation and management.If an enterprise is a state-owned enterprise,the probability of its bond default will be reduced relative to other enterprises.If it is a listed company,the probability of its bond default will also decline.As for the weighted average interest rate of bonds issued by enterprises,the balance of external guarantee and interestbearing debt ratio are positively correlated with the probability of bond default.Therefore,enterprises should do a good job in debt management and strive to reduce the average cost of capital.On the other hand,the total amount of bonds issued by an enterprise does not have a significant impact on the probability of bond default,which requires a comprehensive judgment based on the investment decision of the enterprise,its position in the industrial chain and its operation and management ability.As for the measurement of whether enterprises belong to cyclical or surplus industries,empirical results show that the default probability of bonds of enterprises belonging to cyclical or surplus industries will decrease instead,which is inconsistent with the theoretical analysis.One of the most important reasons should be the supply-side structural reform launched in 2015.Finally,this paper puts forward policy Suggestions on cash flow management,debt management,supporting private enterprises' investment and financing and strengthening bond market supervision.