Within a month, three AAA high-credit bonds defaulted one after another, and the "faith of state-owned enterprises", "faith of schools and enterprises" and "AAA faith" continued to be strongly impacted.

01 Brilliance Bankruptcy and Reorganization On November 20, the Shenyang Intermediate People’s Court ruled to accept the creditor’s application for reorganization of Brilliance Auto Group Holdings Co., Ltd. (hereinafter referred to as “Brilliance Holdings”), marking the car company’s formal entry into bankruptcy and reorganization procedures.

The court ruled that Brilliance Holdings' assets were insufficient to pay off all its debts, and it had the reasons for bankruptcy stipulated in the Enterprise Bankruptcy Law.

But at the same time, it has the value and possibility of salvation, and the necessity and feasibility of restructuring.

A month ago, Brilliance Holdings defaulted on its bonds for the first time and was subsequently filed for bankruptcy and reorganization by its creditors.

On October 23, Brilliance Holdings failed to repay the private placement bond "17 Huaqi 05" on time, resulting in a substantial breach of contract.

(Reply "Brilliance Holdings" in the background to view the original text) Subsequently, the credit ratings of Brilliance Holdings and its related debts were lowered many times. Dagong International and Oriental Jincheng finally lowered their credit ratings from the original AAA level to CCC level.

Credit Rating On November 13, Brilliance Holdings applied for bankruptcy reorganization by its creditors. The applicant was Gezhi Automotive Technology Co., Ltd., and the case number was (2020) Liao 01 Poshen No. 27.

Bankruptcy and Reorganization Information It is worth noting that the bankruptcy and reorganization of Brilliance Holdings will affect BMW's acquisition of it?

In April 2018, the Chinese government announced that it would relax restrictions on foreign investors' shareholding ratio in China's automobile industry and open up China's passenger car market in 2022.

Subsequently, Brilliance Holdings and BMW reached an agreement to transfer 25% ownership of BMW Brilliance to the latter for 3.6 billion euros, and at the same time extended the operation period of the joint venture to 2040.

The above-mentioned transaction will be completed in 2022 when conditions permit. After the completion of the transaction, Brilliance Holdings will lose control of BMW Brilliance.

Recently, BMW stated in an email that for BMW, there is currently no indication that the effectiveness of the previous contract will be limited due to the current situation of Brilliance's parent company, and the operating business of BMW Brilliance will not be affected by Brilliance's debt.

and be affected.

According to the latest statistics, Brilliance Holdings has defaulted on debts totaling 6.5 billion yuan, and overdue interest amounts totaling 144 million yuan.

As of the end of the second quarter of this year, Brilliance Holdings' total assets were 193.325 billion yuan, total liabilities were 132.844 billion yuan, and the asset-liability ratio was 68.72%. After deducting goodwill and intangible assets, the asset-liability ratio was 71.4%.

According to statistics from "Small Debt Market Watch", there are currently 13 existing bonds of Brilliance Holdings, with an existing scale of 16.2 billion yuan. The scale of existing bonds is huge. More importantly, how will its over 130 billion debt be resolved after bankruptcy and reorganization?

02 Yongmei may trigger a cross-default of 26.5 billion. On November 10, Yongcheng Coal and Electricity Holding Group Co., Ltd. (hereinafter referred to as "Yongmei Holdings") failed to repay the principal and interest in full on schedule due to tight liquidity, "20 Yongmei SCP003".

It constitutes a substantial breach of contract, with the principal and interest amount of the default totaling RMB 1.032 billion.

(Reply "Yongmei Holdings" in the background to view the original text) Subsequently, China Chengxin International downgraded the credit rating of Yongmei Holdings and related debts from AAA to BB, and included it on the watch list for possible downgrades.

It is worth noting that China Chengxin International’s steep downgrade of its rating was not only questioned by the market, but also subject to self-regulatory investigation for suspected violation of relevant regulations.

Credit Rating What is unexpected is that Yongmei Holdings defaulted, causing huge waves in the credit bond market.

01 After Yongmei Holdings defaulted, the secondary market plummeted and stampeded. The main entities issuing bonds changed from coal companies to urban investment companies and local state-owned enterprises. The market suddenly changed its tone when talking about debt.

02 Due to large market fluctuations, cancellations of issuances in the primary market are common.

According to statistics, since Yongmei Holdings defaulted, more than 28 publicly issued bonds have been canceled or postponed, with a scale of up to 22.6 billion yuan.

Different from previous defaults, this round of debt defaults represented by AAA state-owned enterprises was mostly unexpected by investors.