Spain sold € 2.22 billion of debt due 2014, 2015 and 2017, exceeding the maximum target of €2 billion at an auction on Thursday.  

Today`s debt auction saw robust demand even as borrowing costs surged amid the financial instability especially as the government is expected to formalize the request for as much as  €100 billion of aid to assess its ailing banks.

The treasury sold € 602 million of debts due 2017 with an interest at 5.05 percent, and an average yield at 6.072 percent, up from 4.96 percent at an auction in May.  Demand at 5-year debt sale was 3.5 times strong versus 3.14 at the previous auction.

Spain also sold € 669.56 million of debt due 2014, with a coupon rate of 3.4 percent. The average yield stood at 4.706 percent, nearly double the yields recoded at 2.069 percent in the previous auction, with a bid-to-ask ratio of 3.96 versus 2.81.   €660 million of three-year bills was sold with coupon rate of 4 percent and average yield of $5.547 percent versus 4.876 percent the auction ago. The bid-to-ask ratio was also up at 3.18 from 3.01 seen in May.

As long as borrowing cost remains above 7 percent on 10-year bonds, which is the highest rate recorded since Spain joined the euro, it definitely boost fears the country could be the latest euro zone country to take sovereign bailouts. Spanish 10-year yields today are trading lower after the auction down to around 6.43% as of 10:00 GMT.

The troubled county didn`t formally ask for a bailout yet, but it might be this afternoon as finance ministers meet. The government will release an independent audit of the banks, which have been stressed by the aftermath of property crash and a recession and accordingly they will gauge the amount of bailout needed.

Euro zone finance ministers meet at 15:00 GMT in Luxemburg on Wednesday to finalize Spain`s final bid to rescue its faltering financial system, where they will be addressing efforts made to contain the debt crisis.

Leaders of the euro zone`s four-largest economies also meet in Rome on Friday ahead of the EU summit in Brussels on May 28-29 , where leaders seek to produce a lasting strategy to support growth in the euro zone.

Italian Prime Minister Mario Monti on Friday will host a four-way summit in Rome with German chancellor Angela Merkel, French President Francois Hollande and Spanish Prime Minister Mariano Rajoy.

Eyes will track these meetings which will rather shape the worsening outlook for the euro zone. Now, Spain is highly-monitored as the troubled country will likely use the audits results to request the bank aid very soon.