Research On The Causes And Prevention Of Bond Default Of Evergrande Group

As the pillar enterprise of our country,real estate has made great contribution to the economic development in the past 20 years.However,if the real estate industry overheated,it will make housing prices rise too fast,asset price bubbles and debt increase phenomenon,which will play a negative role in economic development.In order to promote the smooth development of the real estate industry,the state has strengthened the control of the real estate industry since 2015,and raised the financing threshold,which makes it difficult for real estate enterprises to obtain funds.Since 2018,because of the difficulty in obtaining funds,real estate enterprises can not be timely debt repayment,,began to appear bond default phenomenon.The economic environment is not good,the financing environment is tight and the covid-19 epidemic from 2020 to2022 affects,after 2020,the real estate enterprise development falls into trouble,the bond defaults incident frequently occurs,that includes Evergrande Group.As the leader of real estate enterprises,Evergrande Group has always been strong capital and development momentum,but at the end of the 2021 broke the news of US dollar debt default,which has attracted widespread attention.In this case,this paper carries out further research on Evergrande bond default.This paper sorts the causes of corporate bond default,the economic consequences of default and the measures to prevent the risk of bond default firstly,then analyses the use of business cycle theory,Information asymmetry theory,financial distress theory and risk management theory in case studies.Then it combs the overall financing situation of real estate enterprises and the situation of bond default,and then uses the case study method to take the Evergrande Group bond default event as an example,through the information and data of recent years,analyzes the bond issuing motive,the reasons of bond default and the consequences,then puts forward the corresponding measures to prevent the risk of bond default.The study of Evergrande Group’s bond default events can bring some reference value to the enterprises with similar problems.Through the research,we found that the Evergrande Group expanded too fast during the strategic transition,in the later,the economic downturn and the impact of policies,the capital chain was breakdown,which brings negative impact on the enterprise itself,but also harm the interests of stakeholders.Facing the phenomenon of bond default,real estate enterprises should adjust their development strategy in time to avoid blind expansion,and should strengthen the management of capital chain and improve the level of risk management,in addition,relevant policies for the development of housing enterprises should be introduced in a timely manner;investors should be cautious in their investments to reduce capital losses;and rating agencies should enhance the professionalism of their ratings to ensure the authenticity and reliability of credit ratings.