Credit Risks Frequently Exceeded 14.5 Billion Credit Defaults During the Year
“The worst debt ever issued!
“In the face of the embarrassing situation that Oriental Garden (002310, SZ) planned to issue 1 billion debts but only raised 都市夜网 50 million yuan, on May 21, some media described it.
“Daily Economic News” reporter noticed that behind the difficulties of Oriental Garden’s debt financing, frequent credit defaults, corporate debt crisis, and asset management product risk events, and many of the story “protagonists” are listed companies.
”Daily Economic News” reporter statistics found that since this year (as of May 19), 17 credit bonds have defaulted, involving 10 issuers; the total amount of default is 145.
6.4 billion, an annual increase of 36.
Among the issuers involved are multinational listed companies such as Rich Bird (Hong Kong stock 01919), Kaidi Eco, ST Zhongan.
From the perspective of debt defaults of large listed companies, the issuers of credit bond defaults in 2018 were Rich Bird, Kaidi Eco, ST Zhongan, Chunhe 杭州桑拿 Group, Yiyang Group, Shenwu Environmental Protection, Dandong Port, Zhongcheng Construction, Dalian Machine Tool.And Sichuan Coal Group.
Among them, Dandong Port, Dalian Machine Tool and other companies have defaulted many times during the year.
”Daily Economic News” reporter noted that in early May, large private enterprises in Zhejiang Province, selected for many years as “Top 500 Chinese Enterprises,” Dunan Group was shocked to cover up the debt crisis.
Fortunately, Dunan Group is currently in breach of contract again.
But not all publishers are so lucky.
Within one week from May 7 to 13, successive listed companies announced successive debt defaults.
For example, * ST Zhongan announced on May 7 that due to the overall market environment, the company’s multiple accounts receivables replaced the company’s return at the expected time, resulting in the company’s current liquidity tensions, unable to pay the bond principal and interest on time, “15 China Security” bond default.
Kaidi Eco also announced on the same day that the company’s medium-term bill “11 Kaidi MTN1” could not be paid on time.
Kaidi Eco said that the company has worked hard to raise funds for the current period of medium-term bills through multiple channels, but still paid the funds in full according to the agreed financing measures.
In fact, at least a number of defaults have occurred in the bond market, and some asset management products and other debts have also begun to default.
On April 27, CLP Investment Finance announced that the company’s “CLP Investment Finance-Ruijin No. 1 Asset Management Plan” and “CLP Investment Finance-Ruijin No. 2 Asset Management Plan” were delayed for three or four periods.
It is reported that the Ruijin project is divided into four phases with a total scale of 500 million yuan.
Among them, the first and second installments were successfully redeemed in April this year.
On May 10th, Shengyun Environmental Protection announced that due to difficulties in turnover, the company had partially terminated its debts and paid off its debts.
2.9 billion yuan.
This matter may affect the confidence of other creditors in the company, which will further reduce the company’s financing capacity, and the company will face an intensified situation of funding.
It has aroused the attention of regulators. Although a little too much involved asset management products and other later successful payment, or defaulted debts have been properly handled, the related risks have to arouse investor vigilance.
Li Qilin, Managing Director of Lianxun Securities, believes that this round of defaults has two characteristics: one is the intensive and sudden nature of the outbreak.
In May alone, there were no less than five known credit risk events.
Some incidents exceeded expectations with no previous warning signs.
It is difficult to predict just by looking at corporate financial statements.
The second is a wider scope.
In addition to credit debts, non-standard assets represented by trusts have also encountered difficulties in repayment on many occasions. Assets that have just cashed in traditional asset management products have also replaced survivors.
Tianfeng Securities’s solid income Sun Binbin’s team believes that the special feature of this round of bond defaults is firstly that the defaulting entities are concentrated in private listed companies; another feature is that the defaulting companies also involve some advantages of scale and companies with acceptable operating conditions.Large enterprises have a certain existing and influence in the local economy and job market.
CITIC Construction Investment’s solid income team pointed out that this year’s bond default incidents, the first is to add default subjects to private enterprises, which continued the characteristics of 2017, which is related to the current situation of private enterprises operating weaker than state-owned enterprises and subject to stronger financing constraints.
Second, the defaulting entity relies too much on bond financing, and the defaulting entity’s level is generally not high.
Third, too many default owners are listed companies, which is significantly different from 2017 and may be related to the severe re-financing of some listed companies’ stocks.
It is worth mentioning that the general manager of the front-line business department of a listed city commercial bank told the reporter of “Daily Economic News” that as long as the company has a record of default, it will be very difficult to issue debt financing.
The debt must be repaid first, or as soon as the subject’s rating drops, there will be no place in the market.
Unless the local government or creditor thinks the quality of the issuer’s assets is good and is willing to help, it will fall into a vicious circle.
In fact, potential debt risks and disposal issues after a default event have caught the attention of regulators. On May 18, Gao Li, a news report from the Securities and Futures Commission, said in response to a reporter’s question that the Securities and Futures Commission noted the recent high redemption risk in the bond market.
The CSRC has reminded relevant departments to focus on pre-examination of risks, forecasting, monitoring, and comprehensive research on breaches of contract that have occurred and deal with them.
The risks that may arise from the securities regulatory supervision are being worked out.