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UPDATE 1-Germany to launch 2nd green bond in November with five-year maturity - sources

(Adds details, background)

BERLIN, Sept 24 (Reuters) - Germany is planning to issue its second green bond in November with a five-year maturity as part of its efforts to establish a yield curve for the booming sustainable finance market, two people familiar with its debt plans told Reuters on Thursday.

Finance Minister Olaf Scholz is hoping the auction will raise up to 5 billion euros, the two people said, speaking on condition of anonymity.

The finance ministry declined to comment and pointed to the debt agency, which is scheduled to publish its issuance plans for the fourth quarter on Monday.

Germany has seen good demand for its first-ever green bond, issued earlier in September, which was seen as a landmark moment for Europe’s climate-focused finance drive.

Germany raised 6.5 billion euros from the 10-year bond, after receiving orders from investors of over 33 billion euros.

German officials have described the auction of the first green bond as an important step towards strengthening Germany as a sustainable finance location.

Germany hopes to issue bonds of different maturities to build a yield curve that other countries and companies looking to sell their own green bonds can use as a reference point.

The German programme also includes a unique feature where investors will be able to swap the green bonds for an otherwise identical conventional bond, which it hopes will help mitigate any liquidity concerns.

Germany plans record borrowing of up to 218 billion euros this year, and 96 billion euros in 2021, after temporarily suspending its constitutionally enshrined debt brake to help finance the crisis response to the coronavirus pandemic.

Reporting by Michael Nienaber and Rene Wagner Editing by Paul Carrel and Catherine Evans

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