Spain has successfully raised (EURO)2.2 billion ($2.8 billion) in a debt auction that saw strong investor demand, though it had to pay sharply higher interest rates due to concern that the country may eventually need a bailout.

The auction Thursday came before two auditing firms are to report on how much Spain's troubled banks may need in bailout money.

The Treasury sold (EURO)602 million ($765 million) in five-year bonds at an average interest rate of 6.07 percent, up from 5.4 percent in the last such auction June 7. It sold (EURO)918 million ($1.2 billion) in three-year bonds at 5.46 percent, up from 4.3 percent, and (EURO)699 million ($888 million) in two-year bonds.

Overall, demand was between three and four times the amount on offer, indicating strong investor interest.