And crushing all hopes of pari passu treatment for Spanish bondholders, is this latest confirmation from the EU Commission.
Via Market News [4]:
The European Commission will conduct its own assessment of the Spanish banking sector before deciding what conditions should be set in exchange for financial support from Eurozone governments.
...
Ultimately it would be the European Commission making the recommendations and the Eurogroup taking the decisions, the spokesman said.
He said it was too early to speculate on how exactly the aid would be delivered or how much interest Spain would pay, since that would depend on the exact structure of the aid and on the prevailing market conditions.
Any aid that might come from the European Stability Mechanism, which is expected to start work next month, would enjoy a preferred creditor status second-only to the IMF, the spokesman confirmed.
And there you have it (and hopefully this is not a harbinger of imminent IMF intervention as well. That would not go over too well in Spain).