The Analyzation Of Non-financial Corporations' Bond Default With Deleveraging Policy

Since the beginning of reform and opening up,China's bond market has experienced rapid development for decades.At this stage,issuing bonds to finance enterprises has become the largest financing channel in all financing modes of the entire financial market.Many enterprises issue bonds through the bond market to raise funds for their own development.According to the theory of enterprise management,the development and growth of an enterprise often needs the cooperation of capital operation.It is an inevitable choice for an enterprise to borrow and operate with leverage.Capital flows out of investors to buy bonds and flows into enterprises.Enterprises use the funds raised to produce,promote social productivity growth and support real economic development.However,in recent years,in the policy-led environment of deleveraging,credit risk incidents in the bond market have occurred frequently,especially since the promulgation of the deleveraging policy in 2015,hundreds of bonds can not be paid normally every year.The large number of collective defaults of bonds has alarmed the bond market.Looking at the development process of the whole market,we can see that the main reason why many enterprises concentrate on default in recent years is that the policy orientation of early quantitative easing has provided a lot of preferential treatment for enterprises' borrowing.Under the guidance of the policy,the financing cost has been greatly reduced,many financing channels have been opened,the financing facilities for enterprises have been facilitated,the total amount of borrowing has risen sharply,and the leverage rate of enterprises has been rising to safety.Total alert level.When enterprises adopting radical financing strategy encounter the tightening of funds in the de-leveraging policy,the cost of financing increases with the rise of lending interest rate.If their profits can not achieve synchronous growth,they will have to choose default after measuring the cost and yield of borrowing.The number of defaults in the bond market in 2018 broke out again collectively after a short period of backwardness in 2017.In terms of quantity,123 bonds defaulted in 2018 alone,the highest value ever.The amount of defaults reached 19.851 billion yuan,which was 39.39% more than the total of 8.5985 billion yuan in the previous four years.The frequent and large-scale collective default of corporate bonds has a very bad impact on the entire bond market.The operation of the bond market is related to the health of the entire financial system and the real economy.It is essential to ensure that the default risk of the bond market is controlled within an appropriate range and that the high leverage gradually and smoothly falls to the operation of the whole economy.Comparing the time point of deleveraging policy promulgation with the default scale of corporate bonds,we can find that before the deleveraging policy was promulgated in 2015,the default control of bonds in China was relatively small at a reasonable level,but after the deleveraging policy was promulgated,the bond market began to default on a large scale,and the policy would not make a substantial adjustment in a short time.Enterprises will face certain financial pressures for a period of time,so the impact of de-leveraging policy on bond default in China is how big,the accumulated leverage risk in bond market is how big,whether the default risk can be measured in order to achieve pre-control before the same problems occur,these issues are also a hot topic in the whole bond market at present.This paper focuses on solving the three problems mentioned above: firstly,starting from the theoretical level,combing the historical process of the development of China's bond market,summarizing the policy means issued since the implementation of the deleveraging policy,and explaining the impact of China's deleveraging policy;secondly,from the perspective of empirical analysis,making a brief description of the commonly used risk measurement model,pointing out the application of KMV model to this problem.In order to illustrate the impact of policy on default probability,the KMV model is divided into two groups.Before and after the policy is promulgated,each group is divided into three levels according to the risk level.The high-risk group,the medium-risk group and the low-risk group are considered.The default probability is calculated and analyzed by using the model.The empirical results show that the default probability of the high-risk group and the medium-risk group before the deleveraging policy is less than that after the deleveraging policy,the default probability of the low-risk group does not change and always tends to zero,and the impact on the high-risk group is greater than that of the medium-risk group.The default rate of bonds can be quantified by a model to achieve pre-control.After the promulgation of the policy,the high-leveraged enterprises will be under the pressure of repayment,and the default probability will increase the most.Finally,according to the above research,relevant policy suggestions are put forward to the policy-making and implementation agencies and individual enterprises from both macro and micro levels to help alleviate the high default risk currently faced by the bond market.Individual enterprises are facing financial constraints and debt repayment pressures.