Spain paid the most in at least eight years to sell three-yeardebt ahead of the publication of its banks' capital needs that willdetermine how much the euro area's fourth-largest economy needsfrom European rescue funds.

The Treasury today sold 2.22 billion euros ($2.81 billion) ofbonds, the Madrid-based Bank of Spain said today. That's above a 2billion-euro maximum target for the sale. Three-year bonds maturingin July 2015 fetched an average rate of 5.547 percent, comparedwith 4.876 percent on May 17, and the most since at least 2004.

Spain, which became the fourth euro member to seek a bailout onJune 9, will specify today how much it needs of the 100billion-euro credit line it has been granted to shore up banksburdened with bad loans while tackling a budget deficit as large asthat of Greece amid a recession. Spanish bonds rose after EuropeanCentral Bank Executive Board member Benoit Coeure told theFinancial Times that an interest-rate cut will probably bediscussed at policy makers' July 5 meeting.

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