Research On Default Risk Of YM Holding Group’s Credit Bonds

Since the first credit debt default in 2014,the tranquility of China’s bond market has been broken,the number of defaulting bonds and defaulting subjects has been rising,and the belief of "rigid cashing" in the bond market has been impacted.Especially since 2018,the number of bond defaults in China has risen sharply,and the focus of default has begun to shift from private enterprises to state-owned enterprises,from low credit rating to high credit rating,and from manufacturing to other industries.The credit risk is spreading disorderly.Under the negative impact of large enterprise default events such as the bankruptcy of contractor bank,the thunder of brilliance group and the default of Ziguang group,the risk pricing logic in the bond market is also quietly changing,and the halo of previous beliefs is gradually disappearing.At present,China’s capital market is in the key stage of promoting market-oriented reform and gradually implementing the registration system.The endogenous problems implied by the concentrated outbreak of credit risk in the bond market should attract enough attention from all parties,so as to find out relevant countermeasures that can effectively prevent the credit risk of China’s bond market and promote the long-term healthy and stable development of China’s bond market.Based on the above background,this paper will take the credit debt default of YM holding group from November 10,2020 as the object of case study,use case analysis method,comparative analysis method,quantitative and qualitative analysis method to study and analyze the default event,deeply study the causes and risks of credit debt default,and analyze the real situation of the company behind the unexpected default of YM holding group in detail.In the analysis of the causes of credit debt default of YM holding group,this paper analyzes the influencing factors of default from five perspectives:macroeconomic cycle,industry prosperity,regulatory authorities,intermediaries and the fundamentals of bond issuers.The study found that the reason why YM holding group’s default exceeded the market expectation was that the market did not fully expect the problems such as the unreasonable debt structure,the practically exhausted asset liquidity and the weak external support.At the same time,this paper also uses Z-score Model and KMV model to measure the credit risk level of YM holding group in recent years,and compares the measurement results of the two models with the bond subject rating results given by the third-party rating agency.It is found that the past credit risk pricing logic is no longer applicable,and the credit rating results of YM holding group issued by the rating agency are falsely high and seriously lagging behind,Failed to objectively and fairly reflect the real credit risk situation of the bond issuing entity to the market.Finally,based on the case study results of this paper,in order to promote the stable and orderly development of China’s credit bond market and prevent the default risk of credit bonds,it is proposed that the regulatory authorities should strengthen the regulatory power and responsibility and build a unified regulatory system;Intermediaries should strengthen risk awareness and implement the responsibility of information disclosure;The main body of issuing bonds should pay attention to relevant suggestions such as business robustness and optimizing capital structure.