Source: Jiang Chao Macro Bond Research
Yongmei default impacts market expectations
—Haitong fixed income credit bond weekly report
(Du Jia, Zhang Zirui)
Summary
Industry spread monitoring and analysis: 1) The bond market credit spread widened this week. The interest rate spread of credit bond grades is differentiated, and the maturity spread is narrowing. 2) The interest rate gap between industrial bonds and municipal bonds is basically the same as last week. The interest rate spread of municipal bonds rose slightly this week. This weekend, the AAA-grade spread of municipal bonds was 119BP, up 18BP from last weekend; the AA+ grade spread of municipal bonds was 142BP, up 18BP from last weekend; the AA-grade spread of municipal bonds was 213BP, up 19BP from last weekend. The interest rate gap between industrial bonds and municipal bonds remained basically the same as last week, and the performance of Urban Investment in AA+ credit bonds was significantly better than that of industrial bonds. 3) Horizontal comparison of industries: Among high-grade bonds, media and non-bank finance are the two industries with the highest interest rate spread. The average interest rate spread of medium-sized notes in the AAA-level media industry is 124BP, and the average interest rate spread of medium-sized notes in the AAA-level non-bank financial industry is 114BP. The second is the steel, non-ferrous metals, chemicals and commercial trade industries, with interest rate spreads all around 100BP. Utilities are the industry with the lowest average spread, currently at 88BP.
One-week market review: Net supply declines, and the main behavior is under the rate of return. This week, the net supply of the primary market of major credit bonds was 103.533 billion yuan, an increase from the previous week. Secondary trading is reduced, and the yield is mainly based on the main behavior. Specifically, taking medium-term short-term financing as an example, among the 1-year varieties, the yield exceeding AAA level rises by 13BP, the yield of AAA level rises by 17BP, the yield of AA-level is up by 19BP, the yield of AA+ level rises by 20BP, the yield of AA+ level rises by 20BP, and the yield of AA-level is up by 17BP; among the 3-year varieties, the yield of over AAA level rises by 15BP, the yield of AAA level rises by 16BP, the yield of AAA-level is up by 17BP, the yield of AA+ level rises by 17BP, the yield of AA+ level rises by 17BP, and the yield of AA+ level rises by 17BP, the yield of AA+ level rises by 17BP, and the yield of AA-level is up by 17BP, the yield of AA+ level rises by 17BP, and the yield of AA-level is up by 3-year varieties. The rate is 15BP, the AA-grade yield is 16BP; among the 5-year varieties, the rate of return exceeding AAA level has increased by 10BP, the AAA level yield is 12BP, the AA-grade yield is 12BP, the AA-grade yield is 13BP, the AA+ level yield is 13BP, the AA-level yield is 13BP, and the AA-level yield is 13BP; among the 7-year varieties, the AAA level yield is 5BP, the AAA level yield is 8BP, the AA-level yield is 7BP, and the AA+ level yield is 6BP.
One-week rating adjustment and default situation review: The rating of no credit bond entities was raised this week, and 4 credit bond entities were downgraded. The involved entities were Jackie Chan Construction Group Co., Ltd., Unigroup Co., Ltd., Yongcheng Coal and Electricity Holding Group Co., Ltd., and Henan Energy and Chemical Group Co., Ltd. This week, 24 new default bonds were added, and the issuing entities were Jackie Chan Construction Group Co., Ltd., Yongcheng Coal and Electricity Holding Group Co., Ltd., Gansu Gangtai Holdings (Group) Co., Ltd., and Wen Media Investment Group Co., Ltd. This week, two new defaulting entities were added, namely Jackie Chan Construction Group Co., Ltd. and Yongcheng Coal and Electricity Holding Group Co., Ltd.
Credit bond: Yongmei defaults impact market expectations. 1) Yongmei defaulted and worried that the spread of fear. The credit bond market has been frequently exposed recently. On November 10, this week, Yongmei SCP003 defaulted, which had a particularly big impact on the market, not only because of its status as a state-owned enterprise, but also because the company's own assets are not very poor. The government's previous support signal was positive, and recently it had successfully issued medium-note financing. Under the optimistic signal, the default exceeded market expectations. The market's later interpretations point to insufficient willingness to repay, and the willingness to repay is certainly "unanalyzable", which leads to a large-scale transmission of panic. Similar enterprises in the region and state-owned enterprises in other regions that are in the public opinion are deeply affected, and the secondary market prices of related bonds have fallen sharply; the fermentation of credit risks has also led to a reduction in market risk preferences, and the entry standards have become stricter. Institutions have investigated positions and tightened the entry standards, and low-qualification bonds may be sold, further deepening credit stratification. As the market panic spreads, credit risk may also evolve into liquidity risks. First, the standards of pledge bonds will be increased, making it difficult for pledge financing to affect liquidity. Second, the explosion will lead to a rise in risk aversion sentiment and increase the pressure on product redemption.2) Where will credit bond investment go? On November 13, Yongmei will pay interest of 32.3852 million yuan to the receivable fixed income product interest payment fund account. The principal is still being raised. Whether Yongmei's defaulted bonds can be resolved and the duration of market sentiment remains uncertain. As the end of the year approaches, the financial pressure of enterprises is relatively high, and the amount of credit bonds due in the near future is still large, while the first-tier financing environment is not optimistic, and the overall risks are heating up, so there is no need to be too early to "buy the bottom". Looking ahead, the weakening of the belief in marginal state-owned enterprises and the gradual clearance of zombie enterprises are still continuing. Investment should avoid blindly signing targets and return to the main credit research. Since the credit incidents of state-owned enterprises are mainly concentrated in industrial bonds this year, urban investment has become increasingly mainstream choices, but as the faith fence is pulled out one by one, urban investment bond investment advice should also pay attention to avoiding tail risks, and the differentiation between regions and even between regional platforms will be more obvious.
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1． Industry interest spread monitoring and analysis
1.1 Credit spread widened
This week's credit spread widened. Specifically, as of November 13, the 3-year AAA-grade medium-sized note credit spread was 80BP, up 13BP from last weekend, and the 5-year AAA-grade medium-sized note credit spread was 97BP, up 6BP from last weekend; the 3-year AA+ grade medium-sized note credit spread was 96BP, up 14BP from last weekend, and the 5-year AA+ grade medium-sized note credit spread was 117BP, up 7BP from last weekend; the 3-year AA-grade medium-sized note credit spread was 113BP, up 12BP from last weekend, and the 5-year AA-grade medium-sized note credit spread was 153BP, up 7BP from last weekend.
1.2 grade interest rate differentiation, term spread narrows
credit bond grade interest rate differentiation. Specifically, as of November 13, the interest rate spread of AA and AAA medium-sized notes for 1-year short-term varieties was 29BP, up 3BP from last weekend; the interest rate spread of AA and AAA medium-sized notes for 33BP from last weekend; the interest rate spread of AA and AAA medium-sized notes for 5-year short-term varieties was 56BP, up 1BP from last weekend.
Credit bond maturity spread narrows. Specifically, as of November 13, the 5-year and 3-year AAA medium-term spread was 27BP, down 4BP from the end of last weekend; the 5-year and 3-year AA medium-term spread was 50BP, down 2BP from the end of last weekend; the 5-year and 1-year AAA medium-term spread was 64BP, down 5BP from the end of last weekend.
1.3 Municipal bonds: The interest rate spread between industrial bonds and municipal bonds remains basically the same
This week, the interest rate spread of municipal bonds rose slightly. Specifically, as of November 13, the AAA interest rate spread of municipal bonds was 119BP, up 18BP from last weekend; the AA+ interest rate spread of municipal bonds was 142BP, up 18BP from last weekend; the AAA-level spread of municipal bonds was 213BP, up 19BP from last weekend.
The interest rate gap between industrial bonds and municipal bonds is basically the same, and the performance of Urban Investment in AA+ grade credit bonds is significantly better than industrial bonds. Specifically, as of November 13, the interest rate spread of AAA-level industrial bond-urban bonds is currently at -17BP, basically the same as last week; the interest rate spread of AA+-urban bonds is currently around 119BP, up 4BP from last weekend; the interest rate spread of AA-level industrial bond-urban bonds is currently around 47BP, basically the same as last week.
1.4 Steel, mining: industry interest rate spread, excess interest rate spread widen
Steel, mining industry interest rate spread, excess interest rate spread widen. Specifically, as of November 13, the average credit spread of AAA steel bonds was 114BP, up 19BP from last weekend; the average credit spread of AAA mining bonds (mainly coal mining) was 100BP, up 17BP from last weekend; the excess spread of AAA steel bonds was 34BP, up 6BP from last weekend; the excess spread of AAA mining bonds was 20BP, up 4BP from last weekend.
1.5 Real estate industry: credit spreads and excess spreads widen
Real estate industry credit spreads widen. Specifically, as of November 13, the credit spread of the AAA-level real estate industry was 102BP, up 20BP from last weekend. The credit spread of the AA-level real estate industry is 173BP, up 21BP from last weekend.
The excess interest rate spread of low-grade and high-grade bonds in the real estate industry widens. Specifically, as of November 13, the excess credit spread of the AAA-level real estate industry was 22BP, up 7BP from last weekend; the excess credit spread of the AA-level real estate industry was 61BP, up 9BP from last weekend.
1.6 Horizontal comparison of interest rate spreads in the industry
Among high-grade bonds, media and non-bank finance are the two industries with the highest interest rate spreads. The average interest rate spread of medium-sized notes in the AAA-level media industry is 124BP, and the average interest rate spread of medium-sized notes in the AAA-level non-bank financial industry is 114BP.The second is the steel, non-ferrous metals, chemicals and commercial trade industries, with interest rate spreads all around 110BP. Utilities are the industry with the lowest average spread, currently at 88BP. Among the medium-grade bonds, the comprehensive industry has the highest interest rate spread, followed by the pharmaceutical and biological and non-ferrous metals industries. The AA+ grade comprehensive and pharmaceutical and biological industries have both interest rate spreads above 300BP. In addition, the interest rate spreads in the machinery and equipment, media and mining industries are also relatively high. The interest rate spread in the food and beverage industry is relatively low, at 111BP, which is about 590BP from the credit spread in the comprehensive industry.
2. Primary market: net supply increases, and the main behavior under the valuation yield rate
2.1 Net supply increases
According to Wind statistics, this week, short-term bond issuance was 110.35 billion yuan, with maturity of 101.28 billion yuan; medium notes are issued, with maturity of 24.345 billion yuan; corporate bond issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance issuance of 27.385 billion yuan. This week, the major credit bond varieties issued a total of 265.878 billion yuan, with maturity of 162.345 billion yuan, with a net supply of 103.533 billion yuan, an increase in net supply of 39.814 billion yuan in the previous trading week (October 30-November 6).
From the perspective of the main issuance products, a total of 97 short-term bonds, 32 medium-term notes, 17 corporate bonds, and 108 corporate bonds were issued this week, an increase in the number of issuances compared with the previous trading week. In terms of issuer qualifications, AAA-grade issuers account for the largest proportion is 49%. From an industry perspective, the largest proportion of issuers in the construction industry is 31%, followed by issuers in the comprehensive industry, accounting for 21%. Among the 254 major types of credit bonds issued, 22 municipal bonds account for about 8.7%, and the number of issuances decreased compared with the previous week.
2.2 The main behavior under the valuation rate of return
compared with the association's valuation on November 4, this week (November 11), the main behavior under the valuation rate of return of credit bonds is the main behavior under the valuation rate of return.
Specifically, among the 1-year varieties, the key AAA and AAA grade yields both rose by 2BP, the AA+ grade yields rose by 1BP, the AA grade yields were basically the same as last week, and the AA- grade yields rose by 5BP. Among the 3-year varieties, the key AAA-level yield rose by 1BP, the AAA-level yield fell by 1BP, the AA+ level yield fell by 2BP, the AA+ level yield fell by 4BP, and the AA-level yield was basically the same as last week; among the 5-year varieties, the key AAA-level yield was basically the same as last week, the AAA-level yield was basically the same as last week, the AAA-level yield was basically the same as last week, the AAA-level yield was basically the same as last week, the AAA-level yield was basically the same as last week; among the
7-year varieties, the key AAA-level yield was basically the same as last week, the AA+ level yield was basically the same as last week. Among the 10-year varieties, the yields of key AAA and AAA grades both fell by 3BP. The AA+ grade yield fell by 5BP, the AA- grade yield fell by 2BP, and the AA- grade yield fell by 0BP; among the 15-year varieties, the key AAA and AAA grade yield fell by 6BP, the AA+ grade yield fell by 10BP, the AA+ grade yield fell by 8BP, and the AA- grade yield was basically the same as last week; among the 20-year varieties, the key AAA grade yield fell by 6BP, The AAA-grade yield fell by 2BP, the AA+ grade yield fell by 3BP, the AA+ grade yield fell by 6BP, and the AA-grade yield was basically the same as last week; among the 30-year varieties, the key AAA-grade yield fell by 6BP, the AAA-grade yield fell by 2BP, the AA+ grade yield fell by 3BP, the AA-grade yield was basically the same as last week.
3. Secondary market: transactions decreased, yields mainly
This week's main credit bond varieties (enterprise bonds, corporate bonds, medium notes, short-term bonds) totaled 394.974 billion yuan, a decrease of 21.725 billion yuan from the previous week's turnover.
3.1 Interbank market: main behavior in terms of yield
3.1.1 medium-sized short-term bonds: main behavior in terms of yield
this week's Treasury bond yield. Specifically, the yield on one-year treasury bonds rose by 6BP, the yield on three-year treasury bonds rose by 3BP, the yield on five-year treasury bonds rose by 6BP, and the yield on seven-year treasury bonds rose by 5BP.
Take medium-sized short-term loans as an example. Among the 1-year varieties, the yield exceeding AAA level rises by 13BP, the yield of AAA level rises by 17BP, the yield of AA-level rises by 19BP, the yield of AA+ level rises by 20BP, the yield of AA+ level rises by 20BP, and the yield of AA-level rises by 17BP; among the 3-year varieties, the yield of over AAA level rises by 15BP, the yield of AAA level rises by 16BP, the yield of AAA-level rises by 17BP, the yield of AA+ level rises by 17BP, the yield of AA+ level rises by 17BP, the yield of AA+ level rises by 17BP, the yield of AA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAA+ level rises by 17BP, the yield of AAAA level rise The grade yield rose by 15BP, the AA-grade yield rose by 16BP; among the 5-year varieties, the AAA-grade yield rose by 10BP, the AAA-grade yield rose by 12BP, the AAA-grade yield rose by 12BP, the AA+ grade yield rose by 13BP, the AA-grade yield rose by 13BP, the AA-grade yield rose by 13BP, and the AA-grade yield rose by 13BP; among the 7-year varieties, the AAA-grade yield rose by 5BP, the AAA-grade yield rose by 8BP, the AAA-grade yield rose by 7BP, and the AA+ grade yield rose by 6BP.
3.1.2 Corporate bonds: the main behavior in terms of yield
This week's interbank corporate bonds are mainly profit-making. The yield of 5-year AAA (city bond) rose by 12BP, the yield of 5-year AAA (2) (city bond) rose by 11BP, the yield of 7-year AAA (city bond) rose by 8BP, and the yield of 7-year AAA (2) (city bond) rose by 8BP. The yield of 5-year AA (city bond) rose by 13BP, the yield of 5-year AA (2) (city bond) rose by 12BP, the yield of 7-year AA (city bond) rose by 6BP, and the yield of 7-year AA (2) (city bond) rose by 9BP.
3.2 Exchange market: Index trend declines
This week, the corporate bond and corporate bond index in the exchange bond market both fell slightly, down 0.01% and 0.06% respectively compared with the previous week.
3.3 Municipal Investment Bonds: The main behavior in terms of yield
3.3.1 Corporate Bonds
In the sample we observed, the main behavior in terms of the yield in terms of municipal investment corporate bonds, which were active trading this week. Specifically, the 16 Kundongxu project NPB rose 43BP, the 14 quasi-state-owned bonds rose 35.9BP, the 17 Bazhou Guoyuan bonds rose 35.7BP, the 14 Jincheng urban investment bonds rose 13BP, the 18 Ganheji micro bonds rose 5.1BP, the 19 Hanqiao urban investment bonds rose 4.4BP, the 17 Wuhan Hi-Tech bonds fell 0.3BP, the 17 Xiangtou bonds fell 0.9BP, the 19 Longling Construction Investment bonds fell 7.5BP, and the 17 Jurong urban investment bonds fell 16.1BP.
3.3.2 Medium-term notes
In the sample we observed, the 10 municipal investment medium-term notes that were active trading this week are mainly on the yield rate of return. Specifically, 18 TEDA Investment MTN002 rose 68BP, 17 Liuzhou Investment MTN001 rose 40BP, 16 Beijing State-owned Assets MTN001 rose 29.6BP, 16 Guizhou Expressway MTN001 rose 25.5BP, 20 CEI Huashan Renovation MTN001 rose 6.4BP, 19 Chengdu Urban Rail Transit GN001 rose 6BP, 18 Shaanxi Communications Construction MTN003 rose 3.4BP, 18 Wuxi Construction Investment MTN002 rose 3.4BP, 17 Sichuan Communications Investment MTN001 rose 2.5BP, 17 Sichuan Railway Investment MTN001 fell 7.6BP.
3.4 Industrial bond
3.4.1 Real estate bond
0 In the real estate bond sample we observed this week, the yield of representative bonds is mainly in terms of the yield. Specifically, 19 Beichen Industrial MTN001 rose by 29.3BP, 16 China Resources Land MTN001 (5-year period) rose by 14.7BP, 19 China Communications Construction Real Estate MTN001 rose by 14.5BP, 16 Power Construction Real Estate MTN001 rose by 8.8BP, 18 China Resources Land MTN002B rose by 6BP, 16 Suijian 03 rose by 2.9BP, 19 Pomegranate 01 rose by 0.8BP, 17 Sunshine City MTN004 fell by 0.1BP, and 160,000 02 fell by 11.5BP.
3.4.2 Steel Bond
Among the steel bond samples we observed this week, the yield of representative bonds is mainly in terms of the yield. Specifically, 20 Hesteel Group CP001 rose 39.7BP, 19 Lu Steel MTN007 rose 26.1BP, 18 Lu Steel MTN001 rose 24.7BP, 18 Hesteel MTN005 rose 17.4BP, 19 Baosteel MTN003 rose 9.5BP, 19 Lu Steel MTN003 rose 5BP, 20 Hesteel MTN001 rose 1.6BP, 20 Ansteel CP001 rose 1.5BP, 17 Hesteel MTN007 rose 0.3BP, 18 Hesteel MTN003 went down 17.1BP.
3.4.3 Coal bond
Among the coal bond samples we observed this week, the yield of representative bonds is mainly in terms of the yield.Specifically, due to Yongmei default, the yield rate of 18 Yongmei MTN001 rose sharply. In addition, 16 Jizhong 01 rose by 3085BP, 18 Datong Coal Mine MTN002 rose by 109.1BP, 18 Yanzhou Coal Mine MTN003 rose by 41.6BP, 18 Datong Coal Mine MTN007 rose by 33.1BP, 19 Shandong Energy MTN001 rose by 9.9BP, 19 Shandong Energy MTN001 rose by 9.9BP, 19 Jinmei MTN001 rose by 4.9BP, 18 Yanzhou Coal Mine MTN007 rose by 0.9BP, 16 Jin Coal Mine MTN001 fell by 17.5BP.
3.4.4 Electric Bond
Among the electricity bond samples we observed this week, the yield of representative bonds is mainly in terms of the yield. Specifically, 19 Guangzhou Development MTN001 rose 77.9BP, 19 Datang Ji MTN003 rose 46.5BP, 19 Guodian CP003 rose 44.7BP, 18 Nandian MTN001 rose 24.8BP, 19 Shanghai Electric Power MTN001 rose 23.7BP, 20 Nandian MTN003 rose 19.8BP, 20 Nandian MTN002 rose 17.8BP, 16 Huaneng Ji MTN006 rose 9.7BP, 18 Datang Ji MTN003 rose 1.1BP, 19 China Power Investment Corporation MTN018 fell 0.1BP.
4. Review of rating adjustments and defaults this week
This week, no credit debt entity ratings were raised, and 4 credit debt entity ratings were downgraded, and the number of entities ratings was downgraded. The issuer Jackie Chan Construction Group Co., Ltd., whose rating is downgraded by
is not a municipal investment platform, comes from the construction industry, and its credit rating was downgraded from BB to C last week. The main reason is that Jackie Chan Construction has involved many lawsuits recently and has been included in the list of persons subject to execution many times. The company's liquidity is tight, there is significant uncertainty in the reselling and redemption of "17 Jackie Chan 03", and the risk of external guarantee compensation is high. The issuer Unigroup Co., Ltd., whose rating is downgraded by
is not a municipal investment platform, comes from the manufacturing industry, and its credit rating was downgraded from AAA to CCC last week. The main reason is that the current liquidity pressure of Unigroup Group is relatively high, which may have an impact on Unigroup Guowei's external financing environment, which will in turn have a negative impact on its business operations and debt repayment capabilities. The issuer Yongcheng Coal and Electricity Holding Group Co., Ltd., whose rating is downgraded by
is not a municipal investment platform, comes from the mining industry, and its credit rating was downgraded from AAA to BB last week. The main reason is that Henan Yongcheng Coal and Electricity Holding Group Co., Ltd. (hereinafter referred to as "Yongmei Holdings") has failed to repay the 1 billion yuan ultra-short-term financing "20 Yongmei SCP003" when it expires, which constitutes a substantial default and has a huge negative impact on the company's overall debt repayment ability. The issuer Henan Energy and Chemical Group Co., Ltd., whose rating is downgraded by
is not a municipal investment platform, comes from the wholesale and retail industries, and its credit rating was downgraded from AAA to BB last week. The main reason is that the subsidiary Yongmei failed to fully repay the principal and interest of "20 Yongmei SCP003" on time and was warned by regulatory authorities for information disclosure violations.
This week, 24 new default bonds were added. 17 Jackie Chan 03 has a default principal of 200 million yuan, and the issuing entity is Jackie Chan Construction Group Co., Ltd. The company is a leading industry enterprise in Zhejiang Province's "Hometown of Construction".
20 Yongmei MTN005, 20 Yongmei MTN003, 20 Yongmei SCP006, 20 Yongmei MTN006, 18 Yongmei PPN001, 18 Yongmei PPN002, 20 Yongmei MTN002, 20 Yongmei SCP008, 20 Yongmei SCP005, 20 Yongmei PPN001, 20 Yongmei SCP004, 20 Yongmei Coal CP001, 20 Yongmei MTN004, 20 Yongmei PPN002, 19 Yongmei CP003, 20 Yongmei MTN001, 19 Yongmei MTN001, 20 Yongmei SCP007, 19 Yongmei PPN001, 18 Yongmei MTN001, and 20 Yongmei SCP00319 are all Yongcheng Coal and Electricity Holding Group Co., Ltd., which is a company triggering a cross-breach. The company is a wholly-owned subsidiary established by Henan Coal Chemical Group Co., Ltd. with its state-owned net assets of Yongcheng Coal and Electricity Group Co., Ltd., which it holds.
17 Gangsha 01 default interest of RMB 36 million, and the issuing entity is Gansu Gangtai Holdings (Group) Co., Ltd. The company is a listed company under the banner of Gangtai Group Co., Ltd. (Jin Qilin Analyst).
18 Huawen Media MTN001 has a default principal of 910 million yuan. The issuing entity is Huawen Media Investment Group Co., Ltd. The company is mainly engaged in the operation of media business and exclusively undertakes the operation and management of business businesses such as Securities Times and Huashang Daily.
Last week, two new default entities were added, including Jackie Chan Construction Group Co., Ltd. and Yongcheng Coal and Electricity Holding Group Co., Ltd.
Jackie Chan Construction Group Co., Ltd. is the leading industry enterprise in the "Hometown of Construction" in Zhejiang Province. The latest theme rating is adjusted from BB to C.
Yongcheng Coal and Electricity Holding Group Co., Ltd. is a wholly-owned subsidiary established by Henan Coal and Chemical Group Co., Ltd. with its owned subsidiary. The company's 1 billion yuan ultra-short-term financing "20 Yongmei SCP003" failed to repay when it expires, which constitutes a substantial default. The latest entity rating was downgraded from AAA to BB.
5. Credit bonds: Yongmei default impacts market expectations
Both the yield and interest spreads rose this week, AAA-level corporate bond yields rose by 12BP on average, AA-level corporate bond yields rose by 11BP on average, municipal bond yields rose by 14BP on average, and credit spreads rose sharply.
Yongmei defaulted, and worries spread. The credit bond market has been frequently exposed recently. On October 23, FAW defaulted on October 23, and on November 10 this week, Yongmei SCP003 defaulted on November 10, which had a particularly big impact on the market, not only because of its status as a state-owned enterprise, but also because the company's own assets are not very poor. The government's previous support signal was positive, and recently it had successfully issued medium-note financing. Under the optimistic signal, the default exceeded market expectations. The market's later interpretations point to insufficient willingness to repay, and the willingness to repay is certainly "unanalyzable", which leads to a large-scale transmission of panic. Similar enterprises in the region and state-owned enterprises in other regions that are in the public opinion are deeply affected, and the secondary market prices of related bonds have fallen sharply; the fermentation of credit risks has also led to a reduction in market risk preferences, and the entry standards have become stricter. Institutions have investigated positions and tightened the entry standards, and low-qualification bonds may be sold, further deepening credit stratification. As the market panic spreads, credit risk may also evolve into liquidity risks. First, the standards of pledge bonds will be increased, making it difficult for pledge financing to affect liquidity. Second, the explosion will lead to a rise in risk aversion sentiment and increase the pressure on product redemption.
Where can I go to invest in credit bonds? Looking back at history, there have been vicious default events or waves of defaults that exceed expectations, which have led to the transmission of risks from the credit link to the liquidity link. Under the pressure of redemption, interest-rate bonds and convertible bonds with good liquidity will be sold first. If interest rate bonds are accidentally injured and overshooted during this round of storm, there may be short-term investment opportunities. The participation of credit bonds should be more cautious. On November 13, Yongmei Group's parent company Yuen Chemical held a creditors' meeting. On the same day, Yongmei will pay 32.3852 million yuan of interest to the receivable fixed income product interest payment fund account. The principal is still being raised. Whether Yongmei's defaulted bonds can be resolved and the duration of market sentiment remains uncertain. As the end of the year approaches, the financial pressure of enterprises is relatively high, and the amount of credit bonds due in the near future is still large, while the first-tier financing environment is not optimistic, and the overall risks are heating up, so there is no need to be too early to "buy the bottom". Looking ahead, the weakening of the belief in marginal state-owned enterprises and the gradual clearance of zombie enterprises are still continuing. Investment should avoid blindly signing targets and return to the main credit research. Since the credit incidents of state-owned enterprises are mainly concentrated in industrial bonds this year, urban investment has become increasingly mainstream choices, but as the faith fence is pulled out one by one, urban investment bond investment advice should also pay attention to avoiding tail risks, and the differentiation between regions and even between regional platforms will be more obvious.
