In The First Half Of The Year, The Scale Of Debt Default Exceeded 80 Billion: The Main Body Of The New Default Was Reduced, And The Impact Of The Epidemic Still Remained.

With the increasing number of credit default incidents, the total amount of default in the bond market has increased slightly.

According to Wind data, 65 bonds have been defaulted in the first half of this year, involving a total of 81 billion 477 million yuan, which has exceeded half of last year's total. In the context of the outbreak, many companies have also been affected, and credit risks are still exposed.

"Industrial debt is expected to remain under pressure under the impact of the epidemic. According to the data, the highest proportion of industrial debt is found in bonds defaulting enterprises. Despite the impact of the epidemic this year, the regulatory level has taken care of market liquidity. The overall financing is relaxed, but the differentiation of different enterprises is still obvious. In July 1st, the chief receiver of a large public fund in Beijing told the business reporter in twenty-first Century.

On the other hand, in the normalization of bond default, how to deal effectively after default is also the focus of the market.

Recently, the people's Bank of China jointly issued the notice on matters related to the breach of corporate credit class bonds jointly with the development and Reform Commission and the SFC. In order to speed up and improve the basic system of the unified bond market, the corresponding arrangements for establishing a market-based and legalized bond default disposal mechanism were put forward.

Over 80 billion bond default

According to the data, the scale of default bonds in the first half of this year has reached 55% last year.

In twenty-first Century, according to Wind, 33 of the 65 bonds that broke up in the first half of this year, 33 were issuers of private enterprises, accounting for 51%. In addition, there were more than 33 issuers of defaulted bonds issued by state-owned enterprises, including 23 issuers of central bonds, and 3 issuers of local bonds.

In fact, the 23 defaulted bonds issued by the central state-owned enterprises are all bonds of the Peking University Founder Group Corp (hereinafter referred to as the founder group). Founder Group default on bonds in December 2019.

In February this year, the Beijing intermediate people's court decided to accept the application made by the Beijing bank to restructure the founder group. After the founder group entered the reorganization stage, according to the relevant laws and regulations of the reorganization, the company could not make any individual liquidation during the reorganization period, so the bonds of the founder group's existence period could not be exchanged.

The default of the 23 surviving bonds amounted to 34 billion 540 million yuan, accounting for more than 42% of the total amount of the default bonds in the first half of the year, and the founder group became the largest default entity since the first half of this year.

However, although the size of the default bonds in the first half of the year exceeded the same period last year, there were not many new ones. In the first half of the year, the main body of the history of default was 23, the total amount of breach of contract was 67 billion 777 million yuan, while 11 newly increased default subjects, the new amount of breach of contract amounted to 13 billion 700 million yuan, the number of new default entities decreased by 45%, and the amount of new default amounts dropped by 74.34%.

"Although the total amount of breach of contract increased slightly in the first half of this year, it came mainly from the main body of historical default, and there was no significant increase in the number of new defaults due to the outbreak of the epidemic. On the contrary, because the government promptly took measures to deal with the epidemic, the number of new default subjects and the amount of breach of contract decreased significantly compared with the previous year." According to Dagong's international survey, "for example, the first breach of Founder Group's agreement was at the end of 2019, and its default of this year's remaining debt dragged down the overall default size of the bond market in the first half of the year."

On the grounds of default, Tianfeng Securities pointed out that most of the new default is the conflict between the original operation of the company, the pressure of debt maturity and the exhaustion of refinancing. The deeper reasons include excessive expansion of the company, resulting in higher liabilities and short term increasing. In the context of the structural narrowing of financing channels, the ability of refinancing is exhausted and unable to cope with centralized payment. There are many problems, such as complex business, high leverage in real estate business, large funds occupied in the transformation of the real estate industry, and weak children, and the original operation of the company is in the decline stage, and the impact of the epidemic on the upstream and downstream of the industrial chain and so on.

Epidemic impact differentiation

In response to the impact of the epidemic this year, many agencies have also mentioned the impact of credit risk.

"The first half of the year did indeed accelerate the risk exposure of some enterprises, especially those whose industries were seriously affected by the epidemic, or those whose credit quality was relatively low and their financing channels were relatively narrow. Their credit quality was further affected by the epidemic. At the same time, debt replacement and debt extension are common in the first half of the year, and some enterprises still have substantial breach of contract after debt replacement and debt extension, such as Sander engineering and China finance and so on. Dagong International said.

In fact, Sander environment, Hua Changda and other enterprises mentioned the impact and impact of the epidemic on enterprises.

Under the impact of the epidemic, the default risk of industrial debt has increased. Subdivided into different industries, under the influence of epidemic situation in China, the operation of film and television media, retail trade, port logistics and other industries has been interrupted. Some enterprises have increased the risk of book goodwill and investment real estate impairment. Under the influence of overseas epidemic, the loss of main order and the risk of asset impairment are relatively high in overseas income and overseas assets. A public fund bond fund manager in Southern China said.

In order to cope with the impact of the epidemic, regulators have also issued a series of policies, including guiding lending interest rates and bond interest rates down, issuing preferential rate loans, implementing small and medium enterprises loans, and debt repayment.

"Under this background, market liquidity will remain reasonably abundant in the second half of the year, and the financing channels for enterprises will be more smooth than last year, and the financing cost will be more favorable than last year. The credit risk of the bond market in the whole year will be controllable. But for some enterprises that are less competitive, whose credit quality is weak, and the industry is seriously affected by the epidemic, or for the enterprises with greater dependence on the international market, the impact of the epidemic and the shrinking of the global economy will further weaken their credit quality and accelerate credit risk exposure. Dagong international told the twenty-first Century business news reporter.

From the first half of the 11 new default issuers, the bonds of several enterprises will soon be sold back or expired in the second half of the year, and the default has also made the expected repayment of subsequent bonds more disadvantageous.

For example, Yihua enterprise (Group) Co., Ltd., which has a breach in the first half of the year, Wind data show that in addition to the "17 Chinese enterprises MTN001" which has been substantially defaulted, the company also has "18 Yihua 03", "18 Yihua 02", "17 Yihua enterprise MTN002" and "15 suitable set debts" which are about to expire or sell back in the second half of this year.

"The first half of the year is basically a high level, short duration investment strategy. The current market default is normalized, although to some extent, considering the credit sinking to get higher returns, it will still be cautious about credit risk as a whole." The aforementioned public offering agencies said.

In fact, after the disposal of the default, many of the current disposal of bonds is still slow, and the tolerance of market institutions for risk is not high.