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Ukraine may return to international debt markets in the second half of the year after it receives a bailout loan from the International Monetary Fund, Finance Minister Oleksandr Shlapak said.

The eastern European nation will sell Eurobonds for the first time since April 2013 if market conditions improve, Shlapak told reporters today in the capital, Kiev. Yields of 6 percent to 7 percent for five-year bonds would be acceptable, he said.

Ukraine is facing a third recession in six years, while its currency has lost more than 27 percent against the dollar amid four months of street protests and Russias annexation of the Crimean peninsula. Government bonds have rallied after last weeks preliminary pact with the IMF to unlock $27 billion of international aid.

Yields on Ukraines dollar debt due in 2017 fell one basis point to 8.587 percent today, data compiled by Bloomberg showed. Bonds that mature in June advanced to 98 cents on the dollar from 97.5, pushing the yield down to 20.302 percent.

The hryvnia was little changed at 11.3475 per dollar and probably wont weaken further, according to Shlapak, who said the exchange rate may average 10.5 this year.

The Washington-based IMFs board is due to approve a loan of as much as $18 billion this month in return for a more flexible exchange rate and spending cuts. The government envisages a budget deficit of 4.8 percent of gross domestic product this year, while debt will increase by 129 billion hryvnia ($11 billion) as the currency weakens, Shlapak said.

To repay the debt, the Finance Ministry will borrow domestically and abroad, according to the minister. The government will also sell 1 billion hryvnia of two-year bonds at about 7 percent to finance the army, he said.

To contact the reporter on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Andrew Langley, Paul Abelsky

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Ukraine May Sell Eurobonds After Getting IMF Loan, Minister Says