Bill Robinson

Bill Robinson is the Head UK Business Economist in Corporate Finance and Recovery at PricewaterhouseCoopers. He is a former Director of the Institute for Fiscal Studies and Special Adviser to HM Treasury (covering tax policy issues) and was a Senior Research Fellow at the London Business School (where he specialised in macroeconomic forecasting).

Papers Published in World Economics:

The Rebirth of the Corporate Bond Market

There has been a major switch from equity to debt finance in recent years, associated with a fall in the long-term rate of interest. The paper explores the macro-economic causes of the sea change in interest rates (lower budget deficits, independent central banks, lower inflation expectations) and the micro-economic consequences. Firms are taking on more debt partly for tax reasons and partly because at lower interest rates they have better interest cover. This means they can increase their borrowing at lower risk and hence at lower cost. An examination of a cross section of UK firms from the FTSE 350 shows two major influences on the debt-to-value ratio of large firms. Firms with healthy cash flow are allowed to borrow against that income; and firms whose income is relatively invariant across the economic cycle (as measured by a low asset beta) can afford a higher level of debt.

Read Full Paper >