The Madrid region has been pushed further towards requesting a bailout from Spain’s regional government rescue fund after it pulled a planned debt sale amid limp investor demand, the Financial Times reported. The failure to sell bonds by the Community of Madrid, which has the second-highest credit rating of Spain’s 17 regional governments, came after Moody’s downgraded the debt of five other Spanish regions, including the economic powerhouse of Catalonia.

Bankia and three other Spanish lenders will win European Union approval for government bailouts by the end of November, EU Competition Commissioner Joaquin Almunia said, Bloomberg reported. “The Bank of Spain, the Commission and the management of the four entities have been working on their restructuring plans during the summer, and the commission will take a decision approving them by the end of November,” Almunia said in the text of a speech he gave in Barcelona today.

Spain's debt costs retreated further from their dangerous summer highs Thursday, helped by favorable ratings news and growing hopes that the government will request a bailout, The Wall Street Journal reported. A Spanish bond auction attracted solid demand after Moody's surprised investors late Tuesday by leaving Spain's investment grade rating unchanged. It was widely expected to relegate it to junk status. Moody's pinned its decision on the increasing likelihood of the country asking for financial assistance from the European Union.

Spain has set a €90 billion limit for the size of a bad bank created to take over other financial entities’ toxic real estate assets, a necessary step to obtain European funding for the sector, the Irish Times reported. The country is preparing to receive the first funds from a €100 billion credit line for its banks agreed with Europe in June, paving the way for a fuller bailout that is likely to dominate talks at a European Union summit starting today.

Euro-zone governments are counting on the European Central Bank to provide most of the firepower if Spain requests a bailout, with only a modest contribution coming from the bloc's bailout fund, senior officials said, The Wall Street Journal reported. The governments hope to earmark significantly less than €100 billion ($131 billion) from their €500 billion bailout fund if Spain requests help, the senior euro-zone officials said.

A potential Spanish request for financial aid is becoming caught up in tangled diplomacy between euro-zone capitals, despite Madrid's new willingness to push ahead, The Wall Street Journal reported. A day after a senior Spanish official told reporters that German concerns were preventing Madrid from seeking assistance, German officials insisted Spain hadn't indicated it wants aid. Italy, meanwhile, continued to urge Spain to apply for help in the hope that the step would ease market pressure on its own bonds.

A Spanish court has accepted a filing for bankruptcy from two investment firms that own 31 percent of French property company Gecina, Reuters reported. Alteco and MAG Import filed for bankruptcy on Oct. 3 after a bank refused to refinance a 1.6 billion euro ($2 billion) loan, leaving nearly a dozen lenders exposed. Alteco and MAG Import met conditions for voluntary bankruptcy, two Spanish mercantile courts said in documents released on Tuesday. French bank Natixis has the most exposure to the loan, at 266 million euros.

Spain's Prime Minister Mariano Rajoy Thursday came under increased pressure to ask for a European Union bailout after Standard & Poor's Ratings Services slashed the country's credit rating to leave it teetering just above speculative-grade, or "junk" status, The Wall Street Journal reported.

Spain’s debt rating was cut to one level above junk by Standard & Poor’s, which cited mounting economic and political risks as the government considers a second bailout, Bloomberg reported. The negative outlook on the long-term rating reflects our view of the significant risks to Spain’s economic growth and budgetary performance, and the lack of a clear direction in euro-zone policy,” S&P said.

Two Spanish investment firms that own 31 percent of French property company Gecina have filed one of the biggest bankruptcy actions in Spanish history after a bank refused to refinance a 1.6 billion euro ($2.1 billion) loan, Reuters reported. The potential bankruptcy is the latest chapter in Spain's debt saga since its 2008 real estate crash, which forced banks to write billions of euros off property investments.