A Study On The Causes And Early Warning Of The Default Of Credit Bonds Of Listed Real Estate Companies

As an important financing tool in the capital market,bonds have become an important means for enterprises to obtain external funds and expand their business scale.With the continuous development of the bond market,the credit risk behind bonds gradually exposed.Since 2014,China’s economic development model has undergone significant transformation,which has brought significant challenges to the bond market and bred corresponding credit risks.In March 2014,"11 super Japanese bonds",as the first bond default event,occurred in China.As a result of this event,the reputation of Chinese bonds was severely hit.On July 4,2018,the "16 Hong Bond 02" bond of Zhonghong Holdings Co.,Ltd.defaulted,which was the first real estate company credit bond that had a real default.Since then,the number and scale of defaults by real estate companies have increased year by year,and in 2021,there has been an explosive growth.In view of the frequent occurrence of default events by real estate companies in the bond market,this thesis analyzes the case of bond default of Sunny City,a typical real estate enterprise,qualitatively and quantitatively,to explore the factors that affect corporate bond default in the industry to which it belongs,and applies classic models to provide early warning of bond default,with a view to providing reference for better management and control of bond default.Firstly,this thesis expounds the current situation of default in China’s credit bond market,and then introduces the default event of "20 Yangcheng 01 Debt" in Yangcheng City;Secondly,analyze the causes of default of Sunshine City bonds from both external and internal aspects;Then,the Z-Score model,KMV model,and threshold early warning model are used to evaluate the default risk of Sunshine City,and a second real estate company,Bluelight Development,is introduced to compare the results with the Sunshine City model to test the effectiveness of the three default risk early warning models.Finally,from the real estate company level and the government level,we propose reference suggestions on preventing the risk of bond default.The study found that the real estate industry is greatly affected by policies,coupled with factors such as the nature of the industry that determine the high debt level of real estate enterprises,corporate development strategy errors,and many restrictions on equity refinancing,leading to frequent defaults on real estate enterprise bonds.The Z value in the Z-score model is less than 1,the default distance DD in the KMV model is less than 0,and there are four or more indicators in the threshold early warning model that trigger early warning thresholds.These three signals can effectively help bond issuers cope with credit risk.