The Last Belief In The Bond Market Is Broken Down By Credit Risk To Ensure Market Development.

Recent credit risk has been concentrated.

Since the beginning of 2016, 22 credit debts have been breached.

The main body of the default is spread from private enterprises to central enterprises. China's iron products, due to the large scale of the 16 billion 800 million default bonds, high rating, involving a large number of ultra short fuse, and a wide range of institutions, triggering a chain reaction.

Iron and steel, nonferrous metals, coal and other surplus industries become the worst hit areas.

"14 Xuanhua Beishan debt" and "14 Hainan trading MTN001" city debt application is paid in advance, and the spirit of contract is trampled.

Reason:

Enterprises, plus leverage, cargo management observation, and evasion of debts.

The economy has declined for 33 consecutive quarters in 8 years, and credit risk has increased.

The leverage ratio of enterprises increased rapidly. By the end of 2015, the total debt of China's non-financial enterprises was 105 trillion and 600 billion yuan, accounting for 156.1% of GDP share, and the leverage ratio of financial enterprises increased by 58.1% in 2008-2015.

Under the economic recovery and inflation expectations, monetary policy entered the observation period.

Local debt replacement, financing platform is not bad money, trying to repay city investment bonds in advance to reduce financing costs.

Some enterprises have the motive of evading debts and pferring high-quality assets, such as debt to equity swap and debt restructuring.

Impact and risk:

, direct financing difficulties, credit spreads widening and risk preference decreasing.

The 2002-2015 year bond financing contributed more than 90% to the proportion of direct financing of enterprises.

From the perspective of body size, in 2015, the real economy financing by bond market and domestic stock market was 29430 billion yuan and 755 billion yuan respectively, the former was 3.9 times the latter, the balance of corporate bonds was 14 trillion and 630 billion yuan, and the domestic stock balance of non-financial enterprises was 4 trillion and 530 billion yuan, while the former was 3.2 times that of the latter.

The credit default default has led to a sharp increase in the number of credit debt ratings downgraded. In April, a total of 124 credit bonds were subject to lower ratings or negative outlook.

The credit spreads were significantly expanded, and the scale of the credit debt issued or postponed in the first four months was as high as 38 billion 700 million yuan, 11 billion 100 million yuan, 48 billion 400 million yuan and 114 billion 400 million yuan respectively, all of which reached the highest level in the same period.

Difficulties have affected corporate financing and liquidity, and investor confidence and risk appetite have been compromised.

Resolution: regulators actively defuse risks, maintain healthy development of bond markets, and slow down some credit debt risk.

The SASAC decided to carry out trusteeship by the Cheng Tong Group to China's iron products. "14 Xuanhua Beishan debt" and "14 Hainan trading MTN001" cancelled the early repayment of the money. The Shanxi provincial government plans to provide financial support to the coal enterprises to issue bonds, and the credit risk is partially released, and the regulators try to guard against financial risks.

The Politburo meeting put forward the idea of "maintaining the healthy development of the stock market", which is also applicable to the bond market.

Since the beginning of the year, the credit risk has concentrated on the outbreak, which has superimposed economic cycle recovery, inflation expectations, monetary policy shift to neutral observation period, deleveraging, and debt market adjustment.

In the future, we should promote the construction of basic system and promote a series of reform measures such as capacity clearing, deleveraging, debt restructuring, debt to equity swap, asset securitization, and mixed reform in the future while maintaining stability in policy and strengthening supervision. This will enable the capital market to truly serve the real economy and promote China's economic pformation.