Case Study On Bond Default Of Bohai Leasing

Since the reform and opening up,China’s bond market began to flourish,until the situation of rigid cashing in the bond market was broken in 2014.Since then,bond default events have started to occur one after another,and bond default has expanded rapidly both in quantity and scale,spreading to all fields.The outbreak of the COVID-19 at the beginning of 2020 swept the world.Because we could not predict the emergency in advance,China’s macro-economy was greatly shocked by the impact of the COVID-19.Therefore,most industries were greatly affected,which directly caused many companies to face huge debt repayment pressure.Finally,insolvency occurred substantive debt default,disrupting the order of the bond market.Bohai Leasing Co.,Ltd.is the world’s second largest aircraft leasing company and the world’s fourth largest container leasing company,leading the leasing industry.Its bond default events have caused a considerable sensation in the bond market.This article explores the default events of the short-term bond "19 Bohai Leasing SCP002" issued by Bohai Leasing Co.,Ltd.in 2019.Through analyzing the causes of corporate debt default from external factors such as the macro level and internal factors such as the company level,corresponding conclusions and suggestions are proposed,which can play a certain role in the future development of leasing enterprises and protect the interests of investors in the bond market,and also provide value for promoting the development of the bond market and maintaining the stability of the bond market.This paper first sorts out the cases of default events,analyzes the company’s default behavior from the macro and micro levels,and uses comparative analysis,financial data analysis and Z-value analysis.The results show that the decline of the macroeconomic environment caused by the COVID-19 and the deterioration of the industry development environment are the external factors that cause the company’s debt default;The behavior of shareholders pledging their equity at a high proportion,the company providing a high proportion of pledge guarantees to subsidiaries,and the unreasonable term structure of issuing bonds lead to a concentration of debt repayment pressure on the company due to the concentration of bonds on demand,the company’s highly leveraged financial structure,and various gradually underperforming financial conditions The single profitability and the inability to innovate in the business process to cope with the impact of the COVID-19 are the internal reasons for the debt default of Bohai Leasing.Subsequently,the Z-value model was used to calculate the data of several years before the year of lease default in Bohai Sea,objectively stating that the company could also predict the possibility of debt default risk from a quantitative perspective.Finally,although the default issue of Bohai Leasing Company has its own personality,many common issues that can be learned from its personality can be found.Through this default event,it also provides inspiration to bond issuers,investors,and the bond market: for bond issuers,it is necessary to pay attention to changes in the macro environment,diversify the strategic layout,strengthen the voting power of the board of directors,strictly regulate shareholder behavior,and optimize the debt structure;Investors should enhance their rational investment awareness and risk prevention ability,and enhance post investment tracking management;The bond market should strengthen supervision,ensure the timeliness of information disclosure,strictly review and raise the threshold for bond application and issuance.