The Treasury aims to sell bonds maturing in 2014, 2015 and 2017 on June 21. Budget Minister Cristobal Montoro yesterday called on the European Central Bank to prop up the nation's bond market as 10-year borrowing costs surged to more than 7 percent for the first time since the creation of the euro. That yield traded at 7.064 percent at 11:40 a.m. in Madrid, down from 7.105 percent before the sale and 7.158 percent yesterday.

Spanish banks hold 29 percent of the nation's outstanding debt, up from 17 percent at the end of last year. Non-residents hold 37 percent, down from 50 percent at the end of 2011, Treasury data show.

Demand at the auction today for the 12-month securities was 2.16 times the amount sold, compared with 1.84 times last month. The ratio on the 18-month debt rose to 4.42 times from 3.23. The Treasury sold a total of 3.04 billion euros of the securities, just more than the 3 billion-euro maximum set for the auction.

Investors are concerned the nation may need further European aid as it has struggled to clean up lenders for three years. At the same time, the government needs to curb the euro area's third-largest budget deficit just as the economy is mired in its second recession since 2009.

Bank Audit

As part of efforts to restore confidence, Prime Minister Mariano Rajoy's government, in power since December, has commissioned an independent stress test of banks to help it determine how much of the 100 billion-euro European loan it will need to tap. The reports are due on June 21.

In a second test, four auditors will carry out a detailed assessment of lenders' books. Those reports, initially due at the end of July, won't be published until September, a person familiar with the plans said today. An official at the Economy Ministry, who asked not to be named, declined to comment on the timetable.

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