Shanghai has selected three primary underwriters to support the nation’s first municipal bond issue under a pilot program introduced by the central government in October, the South China Morning Post reported, citing anonymous sources. Bank of Communications (3328.HKG, 601328.SH), Bank of Shanghai and China Development Bank will underwrite a projected RMB7.1 billion (US$1.12 billion) debt issue with the first subscriptions expected in coming weeks. The bond issue will be used to help pay off RMB10.7 billion that the Shanghai owes to banks from financing for various public works projects. In addition to the three lead underwriters, Shanghai will work with an underwriting team of roughly 20 yet-to-be named institutions on the three- and five-year bond issuance. Beijing’s pilot program lifted a ban on direct bond issuance for Shanghai, Beijing, Guangdong province and Zhejiang province; local governments are typically required to have the central Ministry of Finance sell bonds on their behalves. The central government is expected to expand the program if it proves successful.