Credit Risk

Bonds are a vital part of any effective investment portfolio, providing stable cash flow. Despite their generally secure returns, bonds come with risks, primarily default and credit risks. Even sovereign bonds can face bankruptcy risks, making it crucial to assess these risks before investing. Understanding these risks helps investors make informed decisions and manage their portfolios effectively.

As America continues to maintain a high-interest rate, the borrowing cost for companies still remains at a peak. However, compared to other bonds, bonds related to ESG enjoy a lower yield, but seldom do we see small or startup companies issue green bonds. This is because issuing green bonds requires the funds only to be used on certain ESG projects, which is normally not the primary goal for small and startup companies. Hence, a new type of bond, Sustainability-Linked Bonds, is created. In this article, we will briefly introduce the concept and principle of Sustainability-Linked Bonds.

In 2023 bank collapsed, with UBS’s acquisition causing Credit Suisse’s AT1 bond cancellation. As investors, do we know the intricacies of AT1 bonds and savvy strategies to navigate their potential risks?

Preface In order to grow the business, the current business operators are bolder than in the past, and the financial leverage is generally higher. With the development of technology, the life cycle of products has been shortened, price fluctuations and the frequent entry and exit of competitors have increased business risks. In addition, the development […]

The Capital of Listed Groups are Upscaling According to TEJ data collection, the scale of listed companies had grown from 11.74 trillion to 54.63 trillion from 2000 to 2021. These groups also contain companies from the amount under 10 thousand to 23.3 thousand. The ways of upscaling are establishing new companies on their own and […]

In 2020, COVID-19 broke out after the Lunar New Year in Taiwan, and tourist hotels became the “first row of the tsunami” of the epidemic. Under the impact of the outbreak on the domestic demand market, the operating conditions of the restaurant & hotel industry are pretty severe, and some old hotels still face the […]

Preface At the end of 2021Q3, Evergrande Group (3333.HK), the real estate leader in China and other companies defaulted on debt: Sinic Holdings Company (2103.HK), Fantasia Holdings Group (1777.HK), and Sunac China Holdings Limited (1918.HK) were also named by the media as the next company that may face a crisis. This wave of crisis events […]

Preface In the previous article, we introduced the China Evergrande’s bond default case. This case started a series of explosions in China’s real estate company’s debt default. According to statistics, in the first three quarters of 2021, the cumulative number of defaulted bonds of Chinese real estate companies reached 39, an increase of 25 over […]

In the previous article, it was mentioned that Easy Visible (600093) was changed from traditional trading to supply chain gold business by the actual controller Tian Hui Leng in 2014, and the actual controllers changed three times in the past seven years. They faced with the situation of late submission of financial reports, substantial loss of assets and hollowing out of assets. During the investigation by the competent authority, this article first used public information to speculate on the company's fraudulent practices and the role of the three actual controllers.

Preface In 2021, China’s three listed companies of SSE and SZCE did not send out 2020 financial reports at the end of April. Steyr Motors GmbH (000760) and Northcom Group (002359) were already in financial crisis and they were delisted on July 23rd. These two companies did not focus on the capital market. It is […]

Introduction TEJ has been developing the Taiwan Corporate Risk Index (TCRI) for over 20 years, providing an effective and easily interpretable method for assessing risks and analyzing data. Our mission and goal have always been to promptly deliver significant and relevant information related to credit risks to our clients. In the Year of the Dog […]

Adopting the concept of Real Options of Merton Model (1974) → Uses daily stock prices to predict a company’s credit risk. After the calibration by TEJ for Taiwan’s market, the predictive ability of CRMM significantly improves and is suitable for Taiwan’s booming stock market and underdeveloped bond market. It is combined with TEJ’s financial database and is […]