Brady to step down from bond agency helm

UK Municipal Bonds Agency (UKMBA) chief executive Aidan Brady is stepping down from his role as chief executive after leading the organisation for five years.

Brady’s departure comes a week after the announcement that the agency had appointed financial advice firm PFM as its “managed service provider”.

Brady is understood to have accepted a new role as a senior adviser at accountancy firm Ernst & Young (EY) to work on finance advice to local authorities.

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In a letter to bond agency shareholder councils, UKMBA chair Sir Merrick Cockell said: “Aidan Brady, our chief executive, will be moving on to take up new opportunities at the end of October and the UKMBA board will be supported by the client side arrangements with the Local Government Association (LGA).

“He helped the LGA develop the business case and has navigated the UKMBA through formation to the new arrangements outlined in this letter.

“We are enormously grateful to Aidan and wish him well in his new activities.”

Sir Merrick’s letter provided encouragement to shareholders to participate in the agency’s activities in the wake of last week’s rise in the Public Works Loan Board interest rate.

It said that the appointment of PFM would mean that “we will very shortly be able to offer low cost finance on terms acceptable to councils”.

He said: “With the need to invest in housing and infrastructure high on councils agendas, the ability to borrow at competitive rates is vital.

“The UKMBA has always had the objective of beating the PWLB rate and of offering an alternative route to borrowing that could be used in the event of changes to PWLB rules.

“The announcement of the increase in the PWLB rate in recent days suggests that this route is needed now.”

Last week, Brady told Room 151 that PFM will “be working with a group of councils to revise the bond structure and remove the joint and several guarantee requirement, which we hope will lead to the launch of an initial and subsequent bonds”.

The joint and several guarantee, which was originally proposed as part of the agency’s offer, meant all borrowers would be jointly liable, should one borrower fail to repay.

It is understood that PFM’s plan also includes new flexibilities in the proposed bond structure to avoid early repayment penalties.

In addition, the agency is set to revive plans to allow councils to take advantage of short-term borrowing through a separate mechanism to the bond.

Brady’s new role at EY is understood to be part of a push by the accountancy firm to move further into the local authority space, and he will provide advice to councils on corporate finance.

Brady joined the UKMBA as interim managing director in 2014 after providing advice on its creation and before being appointed chief executive.

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