Research On The Case Of Bond Default Of Liyuan Precision Manufacturing Company

As an important place for Chinese enterprises to raise funds directly,the bond market has made significant progress through the accelerated growth stage since its inception.Its scale,volume,and transaction varieties have also been expanding.It has become an indispensable part of China’s financial market.Since China entered the new standard development,with the upgrading and optimization of industrial structure,the slowdown of economic growth,and the implementation of deleveraging and other policies,various hidden risks in the market have gradually emerged.After the first major national debt default in the bond market in 2014,corporate bond default events emerged one after another.The subject of default has expanded from private enterprises to high-rated large state-owned enterprises,and the amount and quantity of default have also increased.The frequent occurrence of default events disrupted the original operation order of China’s bond market and damaged the interests of relevant subjects.Therefore,to prevent the risk of bond default and avoid such events,it is essential to explore the bond default of micro subjects deeply.Based on this background,this paper selects the Liyuan Precision Manufacturing bond default event as the case study object because it is the first default event in the non-ferrous metal processing industry and has strong typicality.By summarizing the relevant research literature at home and abroad,this paper obtains the current research results of the causes of a bond default,credit risk measurement methods,and preventive measures.Therefore,the relevant theoretical basis of bond default is mastered,which provides a theoretical source for subsequent analysis and research.In the case analysis part,this paper firstly combs the general situation,bond issuance,and default process of Liyuan Precision Manufacturing Company.Then,this paper uses the methods of financial analysis and model construction to analyze the causes and economic consequences of Liyuan Precision Manufacturing bond default.The conclusions of this paper are as follows:Corporate problems are the main reasons for bond default,such as radical investment strategy planning,unreasonable debt maturity structure,lack of corresponding credit risk early warning system,and so on;In addition,the occurrence of corporate bond default is also affected by external factors,that is,the macroeconomic trend and the development of the company’s industry;In terms of the long-term and short-term response of the capital market and the company’s operation and development,the occurrence of bond default has had a negative economic impact on the company.Through the analysis of Liyuan Precision Manufacturing bond default event,the case enlightenment obtained in this paper is as follows:As for the subject of issuing debt,it is necessary to make a sound strategic plan,arrange a reasonable debt maturity structure,improve the internal control mechanism of the company and establish a credit risk early warning system.For investors,they should improve their risk identification ability,make reasonable investment arrangements and pay close attention to market developments.For the level of relevant institutions,they should perfect the bond supervision and management system,improve the bond credit rating system.