Study On Orient Landscape Bond Default Risk

In order to adapt to the development of market economy,since 2014,China’s bond market has gradually broken the practice of invisible government guarantee,and bond defaults have occurred from time to time.In early 2019,the bond "18 Donglin CP002" issued by Orient Landscape suffered a technical default and attracted wide attention.Based on the changes of various risk factors before and after the event,this paper studies the substantial default risk of Orient Landscape bonds,and puts forward the corresponding risk prevention countermeasures.This paper first reviews the relevant literature,defines the related concepts of bond default risk,and combs the logical relationship of this study based on risk management theory,information asymmetry theory,financial dilemma theory and priority financing theory.Secondly,the technical default event of "18 Donglin CP002" bond of Orient Landscape is introduced,which lays a foundation for the following study on the substantial default risk of Orient Landscape.Thirdly,the paper constructs a bond default risk identification framework,and identifies and analyzes various risks faced by Orient Landscapes.The research finds that: in terms of market risk,factors such as changes in monetary policy,financial policy,industry-related policies and the special attributes of the company’s industry lead to limited financing of Orient Landscape.In terms of financial risks,the capital structure is unreasonable,the asset-liability ratio is high,the current liability ratio in the debt structure is large,and the cash repayment ability is weak.In terms of operational risks,the corporate governance level is poor,the largest shareholder and its consistent actors have a high concentration of equity,frequent equity pledge financing,and the company has problems such as related transactions,non-operational capital occupation and illegal information disclosure.There are high risks in the company’s development ability,profitability and operation ability.Then,this paper establishes a comprehensive evaluation model of the default risk of Orient Landscape bonds by using entropy weight-TOPSIS method,and quantifies its substantial default risk level.The evaluation results show that: During the period from 2017 to 2021,the default risk of corporate bonds in 2019 is the highest;The operating risk of an enterprise has the greatest impact on its bond default risk,the level of financial risk reflects a large problem in the company’s solvency,and the market risk also has a certain impact on the enterprise.Finally,this paper puts forward countermeasures and suggestions for Orient Landscape to prevent and control the risk of bond default: improve the level of corporate governance,formulate a reasonable development plan according to their own business conditions,establish an optimized financing management mechanism,and improve the ability of enterprises to cope with market risks.Bond financing can bring certain financial leverage effect to enterprises,but excessive debt financing will also bring huge financial risks to enterprises.The main innovation point of this paper is to study how to identify,quantify and control the material default risk of bonds based on the technical default event of Orient Landscape bonds.It is hoped that it can provide reference for the enterprise itself,other enterprises in the industry and many investors to control default risk,and can better promote the healthy development of the bond market.