Study On The Causes And Economic Consequences Of Bond Default Of Private Real Estate Enterprises

Since the 1980 s,China’s capital market has been developing and expanding,and gradually transitioning from high-speed growth to high-quality development.As an indispensable part of China’s capital market,the custody balance of the bond market had reached 144.8 trillion yuan by the end of December 2022.As an important tool of direct financing,bonds provide more diversified financing methods for issuing enterprises and help the operation and development of enterprises.However,since the default of Chaori bonds in 2014 broke the belief of rigid payment in China’s bond market,the number and amount of bond defaults have gradually increased in the past eight years,and the number and amount of bond defaults in the real estate industry have also increased.With the support of many internal and external factors,the bond defaults of real estate enterprises have entered the peak outbreak in 2021.Among the defaulters,real estate enterprises account for a large proportion and most of them are private enterprises.Many leading traditional private real estate enterprises have defaulted on bonds.The enterprise selected in this paper,Yango Group,is a typical case.Bond default has seriously affected the operation and future development of enterprises,and damaged the order of bond market and the interests of related investors.Therefore,it is necessary to deeply analyze the causes of bond default,analyze the economic consequences and draw enlightenment for enterprises and related market players,so as to find countermeasures.This paper takes Yango Group as the research object,uses the methods of literature study,case study and qualitative and quantitative analysis to explore the causes and economic consequences of its bond default,and puts forward enlightenment and suggestions based on the analysis results.Firstly,the literature research method is used to sort out the relevant literature on the causes,economic consequences and countermeasures of bond default.Secondly,it introduces the case,describes the general situation of private housing enterprise default and the reasons for choosing this case,and introduces the basic situation of Yango Group and the process of default event.Secondly,it comprehensively uses qualitative analysis and quantitative analysis to analyze the external and internal causes of the bond default of Yango Group,and then uses the event study method,factor analysis method and qualitative analysis method to study the economic consequences of the bond default of Yango Group on the enterprise itself and the outside world.Then,based on the analysis results of the causes and economic consequences mentioned above and combined with the existing countermeasures of the group,the author puts forward enlightenment and suggestions.Finally,the following conclusions are drawn: first,bond default is an event formed by the joint action of external and internal factors.The economy,industry and financing environment are all external influencing factors,while the weak external supervision is indirect inducing factor;The internal causes include management mechanism,expansion strategy and its own financial status,among which the lack of debt paying ability is the most critical factor affecting bond default.Secondly,the bond default event causes the market reaction of enterprises and the rapid deterioration of their financial status,and the difficulty of refinancing increases sharply.At the same time,it intensifies the credit crisis in the bond market and harms the interests of investors.Finally,this incident can provide enlightenment and targeted suggestions for similar enterprises,credit rating agencies,market regulatory authorities and investors.