2020-11-21

Caught off guard! Three banks were investigated and supervision was taken

By yqqlm yqqlm
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Yongcheng Coal and Electricity Holding Group Co., Ltd. (hereinafter referred to as”< span class=”entity-word” data-gid=”13041859″>Yongmei Group“)’s sudden default is causing market shocks.

Pull out the radish and bring out the mud. The “big radish” of Yongmei’s debt default has continuously brought out new responsible parties. On the 18th, the Association of Interbank Market Dealers (hereinafter referred to as the”Association”) announced on November 18 that Haitong Securities was under investigation for allegedly assisting in illegal bond issuance.

On the evening of the 19th, the supervision took action again. This time the banks were investigated. They were Industrial Bank, China Everbright Bank and Central Plains Bank< /span>, as well as China Chengxin and Sigma Certified Public Accountants.

The Association of Dealers launched a self-discipline investigation on Industrial Bank, China Everbright Bank

Central Plains Bank, etc.

On the evening of November 19th, the NAFMII conducted a self-discipline investigation on Yongcheng Coal and Electricity Holdings Group Co., Ltd. and interviewed a number of intermediaries, and found that Industrial Bank Co., Ltd., China Everbright Bank Co., Ltd. and Zhongyuan Bank Co., Ltd. and other lead underwriters, as well as China Chengxin International Credit Rating Co., Ltd., Sigma Certified Public Accountants (special general partnership) There are acts suspected of violating the self-discipline management rules of the inter-bank bond market.

According to the”Regulations on Self-discipline of the Interbank Bond Market” and other relevant regulations, the Association of Dealers will initiate a self-discipline investigation of relevant intermediaries.

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And on the 18th, the Interbank Market Dealers Association issued According to the announcement, recently, the Association of Dealers conducted a self-discipline investigation on Yongcheng Coal and Electricity Holdings Group Co., Ltd. (hereinafter referred to as Yongmei Holdings). Based on the clues obtained from the investigation and combined with relevant market transaction information, it was discovered that Haitong Securities and its related subsidiaries were suspected of providing assistance to the issuer in issuing bonds in violation of regulations, as well as suspected violations of market manipulation, involving non-financial corporate debt financing instruments and Exchange market corporate bonds.

The Association of Dealers stated that it will conduct a self-discipline investigation on Haitong Securities and its related subsidiaries in accordance with the “Rules for Self-Discipline in the Interbank Bond Market”. If it is found during the investigation that the relevant institutions are suspected of disrupting market order, such as market manipulation, the Dealers Association will impose strict self-discipline sanctions and transfer them to relevant departments for further processing.

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Subsequently, Haitong Securities announced in response that the company will actively cooperate The relevant work of the self-discipline investigation strictly implements the relevant requirements of the NAFMII”Notice on Further Strengthening the Business Standardization of the Issuance of Debt Financing Instruments” and timely fulfills the obligation of information disclosure.

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Affected by the news, Haitong Securities’s share price on the 19th bucked the trend Fell 6%.

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On the evening of November 18th, the Association of Dealers issued the”About”Notice on Further Strengthening the Business Regulation of Debt Financing Instruments”, clearly prohibits the structured issuance of bonds, and requires issuers not to subscribe directly or actually funded by the issuer, but indirectly subscribe for self-issuance through affiliates, asset management products, etc. For debt financing instruments, the issuer shall make relevant commitments in the”Issuance Plan” and confirm in the”Issuance Status Announcement”. Underwriters, investors, etc. shall not deliberately assist the issuer in”self-financing”.

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event review

On November 10, Yongcheng Coal and Electricity Holding Group Co., Ltd. issued an announcement stating that due to the shortage of liquidity, the company will not be able to repay the principal and interest in full due to the 2020 third phase of ultra-short-term financing bonds”20 Yongmei SCP003″. Has constituted a substantial breach of contract.

Because there was no warning beforehand, a 1 billion yuan winning ticket was issued 20 days before the default. Yongmei Group’s default caused an uproar in the market.

As a core enterprise under Henan Energy and Chemical Group, the largest state-owned enterprise in Henan Province, Yongmei Holdings had a monetary asset of more than 40 billion yuan at the end of September, but it could not even get 1 billion yuan.

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The next day after the”accidental” mine explosion of Yongmei Holdings, The butterfly effect quickly appeared, and China Chengxin International quickly downgraded the subject rating of Yongmei Holdings and its controlling shareholder Yunenghua Group from AAA to BB, and included them on the downgrade watch list. Many domestic and foreign bonds of coal companies, urban investment and local state-owned enterprises continued to fall.

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Up to now, Yongmei Holdings has a total of 23 existing bonds. The stock size is 23.41 billion yuan, and its bonds due within one year reach 12 billion yuan.

As the parent company Henan Energy and Chemical Group, which holds 96.01%of Yongmei Holdings’ shares, its credit rating has also been reduced from AAA to BB, which makes the outside world worry about its involvement in the risk of cross default .

On the 19th, according to the 21st Century Business Herald, Yunenghua and the principal convened a pre-communication meeting with the holders of”20 Yongmei SCP003″ to discuss the issue of the extension of”20 Yongmei SCP003″. However, some creditors did not agree to the renewal plan, which means that 26.5 billion yuan of Yunenghua and Yongmei bonds may trigger a cross default.

According to the statistics of CICC, Yongmei and Yunenghua’s remaining bonds amounted to close to 50 billion yuan, and all publicly offered bonds of parent and subsidiary companies totaled 26.5 billion yuan, all with cross-protection clauses. Among them, Yongmei Coal has a total of 15 15 billion yuan, and Yunenghua has a total of 10 bonds of 11.5 billion yuan.

“If cross-default is confirmed, it may lead to further increase in the pressure of companies to pay for concentrated payments in the short term.” CICC said.

The impact of Yongmei’s default on the market is relatively controllable

The aftermath of Yongmei’s bond defaults continues, which also affects the tense bond financing environment. Many coal company bonds Prices fell, and corporate bond issuances in Henan and other provinces were cancelled. In order to ease the sensitive nerves of market fragility, in addition to the central bank’s recent release of excess liquidity to ease the shortage of funds, relevant departments are also releasing positive signals to boost market confidence.

After the Yongmei Bond default incident, the industry has called for greater efforts to crack down on violations of laws and regulations, jointly maintain order in the bond market, and avoid disorderly defaults. Zhang Xu, chief fixed-income analyst at Everbright Securities, said that compared with other financing methods, bond financing is more convenient, lower issuance costs, and fewer requirements for collateral. However, the above-mentioned characteristics of bond financing are derived from its historically low default rate and orderly defaults. In recent times, the default of individual AAA-level entities has disrupted the previous orderliness, which has resulted in an increase in the overall financing cost of the bond market. And difficulty, reducing the quality and effectiveness of financial institutions in supporting the real economy. Orderly default will help the market grow, and disorderly default will destroy the credit accumulated for more than ten years. Only when the order of defaults is maintained can it help strengthen market discipline and allow the Chinese bond market to develop more healthily.

When can we truly understand the rules of awe! Is the penalty still too light?

The source of this article:Financial Times Comprehensive from China Fund News, Brokerage China, 21st Century Business Herald, etc.