It Is Still Difficult To Deal With The "No Peace" Breach Of Contract.

"We haven't even counted 29 small institutions, and we haven't had time to provide a certificate of brokers' seal." A "13 HNA" institutional holder told the twenty-first Century economic news reporter.

This person's tone is very helpless, seems to have made this experience a joke.

In the past few days, the "13 HNA debt" holders conference continued to ferment.

With the result of the "13 HNA" holders' meeting, the bond renewal period has become a foregone conclusion. Although Hainan Airlines has made an apology and self response to the matter for two consecutive times, it is still worth paying attention and attention to the problems of flouting rules and infringement of investors' legitimate rights and interests.

In fact, in twenty-first Century, a business reporter survey found that with the increase in the risk of default on credit debt bonds, many issuers avoided the "breach of contract" by avoiding the issue of a default announcement, choosing OTC payment and extending the agreement.

One of the core problems is the opaque information disclosure and the difficult protection of investors.

"There is no way out, but we have already complained to Hainan Airlines about this practice." In April 16th, a "13 HNA" holder told the business reporter in twenty-first Century.

"Breach of contract" tricks

In twenty-first Century, according to incomplete statistics of publicly available data, the economic report reporters showed that as of April 16th, 44 credit bonds had been defaulted this year, involving a scale of 57 billion 794 million yuan. Meanwhile, 5 defaulting issuers have been added this year.

On the one hand, credit bonds tend to default. On the other hand, outside the default, there are more and more ways to deal with the maturity bonds.

According to the twenty-first Century economic report reporter combing, only in the first quarter of this year, there were some issuers such as distant high industries, China financial giant, Ruyi technology, Phoenix Airport and Sander project.

Among them, the "19 yuan high industrial CP001" issued by far high industry, after announcing the renewal of the bond interest and interest to May 7, 2020, has completed the principal and interest payment in March 10th; the "18 in fusion new big MTN001" of the new large issue of the fusion company has extended the interest portion, and the holder holding 1 billion 108 million yuan share has agreed to postpone the interest until September 30, 2020, and the 19 of the technology is released. Technology MTN001 "and" Phoenix Airport CP001 "issued by Phoenix Airport also postponed interest to June 15, 2020, and paid the principal no longer than 365 days after the original maturity date.

Although bond renewal and OTC payment have become a common way to deal with the default risk of issuers in the market, there still exist many chaos among some issuers in violation of the rules of law.

Prior to this, there were a number of companies such as Tian Guang Mao, Yihua group and other companies, who had lobbied back to the sale before repurchase, or paid for the private negotiation of bonds through the OTC, but they had vague information disclosure or a direct avoidance of the default announcement.

From the issuer's point of view, to circumvent the direct disclosure of a notice of default by means of various means means that corporate financing will not be completely hindered, and it can also maintain a good image of the market.

As far as the case of technology is concerned, in March, when the holder reached the "19 Ruyi technology MTN001" interest deferred payment agreement, the issuer also agreed with the holder at the holder's meeting. All the holders would collect the "19 Ruyi science and technology MTN001" 2020 annual interest through the off-site way. Meanwhile, the holder accepted that "19 Ruyi technology MTN001" did not pass through the Shanghai liquidation. The completion of the 2020 annual interest payment by the channel does not constitute a breach of contract.

It can be seen that the issuer attaches great importance to the determination of "breach of contract". Even if the announcement of the previous day's supernatant has not received the payment of interest payments on the day of interest payment, Ruyi technology still needs to justify the interest rate extension "not a breach of contract".

But what is the practical effect of "covering the ear and stealing the bell"? At that time, Dagong believed that the legal risks and financial risks of Ruyi technology were rising, the short-term debt repayment pressure was very high, and the refinancing ability was limited, and the debt repayment ability decreased. Therefore, it announced that the credit rating of Ruyi technology would be adjusted to AA-, and the rating outlook was negative. "17 Ruyi technology MTN001", "18 Ruyi 01" and "19 Ruyi technology MTN001" credit level adjustment. It's AA-.

Ironically, after Dagong's downgrading, Ruyi technology announced its termination of cooperation with Dagong.

For investors and the market, more and more of these issuers disregard market rules not only seriously infringed on the legitimate rights and interests of investors, but also are not conducive to the formation of the long-term mechanism of the bond market.

"The bond market in China is going through the stage of market clearing." Bao Gang era "has become a past tense, and the demand for transparency and openness in the bond market is even higher. Similar disposal methods such as off-site cashing, not only are not conducive to information disclosure of issuers, but also reduce market transparency, and issuers often avoid bond defaults if they are frequently paid through OTC, which is also not conducive to clearing the bond market, nor is it conducive to forming a disposal system for the marketization of non-performing assets. There is a brokerage analysis.

Breach of contract is still a difficult problem.

"The problem of many bond defaults is accumulated over a long period of time. Although the main body of the bond is actively resolved, it is difficult to get instant results, and it takes time. In particular, the current superimposed epidemic, many industries are affected, enterprises or cash flow problems, prone to short-term cash difficulties, the future credit default pressure or increase. Beijing fixed fund director of a public fund told the twenty-first Century business reporter.

In fact, even if many issuers choose to pay off the exhibition from the outside, it is still unknown whether they can be executed on time.

? ? For the 15 Jin Hong debt default in 2018, the issuer Jin Hong holdings announced a four stage debt repayment plan in October 2018, including the payment of "15 Jin Hong bonds" in December 31, 2018, the interest rate owed by third in the year of interest payment, 40 million yuan, the repayment of debt principal 30% and corresponding interest before March 31, 2019, and the repayment of debt principal 20% and corresponding interest before September 30, 2019; 2 Before March 31st 020, the remaining 50% of the principal debt and corresponding interest payments were repaid.

? ? However, according to the progress of the "15 Jin Hong debt" default disposal announced by Jin Hong holdings in February this year, the issuer paid 40 million interest after the end of 2018, paid 15% of the principal amount to the holder in September 12, 2019, and paid 20% and 35% of the total principal amount to the 15 Jin Hong debt in December 9, 2019, corresponding to August 2018 28. Interest from days to November 30, 2019.

As for the payment of the remaining principal and interest of the "15 Jin Hong debt", Jin Hong holding said it will determine the amount of the subsequent transaction proceeds according to the progress of the company's assets sale, and the specific amount and time for the payment will be arranged separately.

"It is good result that we can repay each other in succession, and some issuers are bankrupt after reorganization, and the rate of liquidation is even lower." A private equity agency in Beijing, a bond fund manager, said: "for investors, it is a very helpless choice. Now many issuers on the market negotiate the extension of the contract before the expiration of the contract to avoid the breach of the contract. Although it is difficult for us to accept it, we also consider giving them a chance. Maybe there is a turning point, and we can only accept it."

According to the twenty-first Century economic report, the agencies have different attitudes towards the "trampling" default bonds.

For example, there are public offering agencies in the industry, because the fund has stepped on the thunder and will cast a big change in the research team. There are also private institutions to punish people such as letters and commenters. However, some agencies said in an interview with the economic news reporters in twenty-first Century, "they did not deal with the research staff of tri ray, but the company set up a special department to strengthen the credit rating work."

"As a bondholder, we will pay close attention to the main fundamentals and maintain close communication with the main underwriters. We will actively recourse against the bonds that have already been defaulted and protect the interests of the holders." A Beijing public fund bond fund manager told the twenty-first Century business reporter.

But the person also said, "in fact, for the problem bonds, the volume of transactions can not be taken up by the bond fund's holdings, and the fund companies follow the three party valuation to adjust the net value passively. In order to protect the interests of the retail investors, the public funds will choose to use the large proportion of the inherent capital to purchase, and keep the" shell "in order to change the space with time. In fact, as a public fund, it is still more vulnerable.

Improving market mechanism

"In the context of increased pressure for breach of contract, this is a matter of concern, and will focus on how follow-up regulators respond." In April 16th, a large brokerage analyst pointed out that he was interviewed by HNA holders.

A market regulator close to the regulator said that "HNA" made a plan to convene the "13 HNA" holders' meeting on the same night in April 14th, and informed that the meeting time was 19 o'clock that night, and the meeting time was 20 to 20:30. About 21 o'clock that evening, the holder's meeting was notified to be disclosed on the China bond information network. However, according to the Shanghai securities Exchange Company bond listing rules, there are 10 trading days for holders' meetings to be announced. The above operation obviously does not meet this requirement, so the notice of the meeting was not disclosed on the Shanghai Stock Exchange website.

"HNA incident is still a case in point. After all, HNA has a long fermentation time. Everyone has a psychological expectation, and the impact of the issuer and the host is quite bad. The follow-up rate is unlikely to be followed by other issuers and owners." A brokerage department of the public offering fund fixed income director said.

"What we need to pay more attention to is that in terms of the protection of investors' system and the disposition of breaching contracts, the domestic market situation is still not yet systematic, and it is estimated that some successes still need to be established." The aforementioned director of investment believes that "if there is such a problem in the subsequent market, it may also arise mainly in the issuer whose risk of default is relatively large." We must continue to explore the process and system of debt disposal after breach of contract from a practical case.

In the current situation, in order to avoid such risks, many organizations still need to take precautionary measures before communicating with our reporters.

"Public funds fixed income and investment in this part of their own risk preference is relatively low. Under the current market conditions, it is more stringent to control risks. It is difficult for issuers to enter the target pool after risk warning. Now we will strengthen the risk management in advance, and the public fund should start from improving the scale and capability of wind control, and solve these problems beforehand, because the subsequent disposal of bond default is a big problem for any investment organization. " Beijing fixed fund director of a public fund told the twenty-first Century business reporter.

It is worth noting that with the gradual promotion of new measures such as the replacement of market bonds, more enterprises will be able to extend their debts through the replacement of bonds.

Although bond replacement can lighten the liquidity pressure of issuers and adjust the debt maturity, avoiding the traditional bonds borrowing new and old, and avoiding default, many cases still cause market controversy.

"Under the background of credit stratification, the issuers of unconventional operations tend to be highly mobile enterprises with relatively limited credit quality. If investors choose to replace, and the rights and interests of debt repayment can be guaranteed on time, then the bond replacement is an innovative operation conducive to market diversification; but if investors choose not to replace, and the corresponding rights and interests can not be guaranteed, then the replacement of "compulsory renewal class" bonds will seriously damage market confidence and affect the recognition of issuers and regions. Southern China, a large public offering fund director, told the twenty-first Century economic news reporter.

Against this background, how to strengthen the implementation of market supervision mechanism and investor protection system is also imminent.

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