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Griesa yields: allows Citibank to process interest payments of Argentine law bonds

Monday, March 23rd 2015 - 17:20 UTC
Full article 40 comments
“Griesa issued said he won’t prevent Citibank from fulfilling its obligations to process interest payments of Argentine law bonds,” Citibank Argentina reported “Griesa issued said he won’t prevent Citibank from fulfilling its obligations to process interest payments of Argentine law bonds,” Citibank Argentina reported
President Cristina Fernandez warned on Friday that Citibank is obliged to pay bondholders despite Griesa’s ruling forbidding the bank to do so. President Cristina Fernandez warned on Friday that Citibank is obliged to pay bondholders despite Griesa’s ruling forbidding the bank to do so.

United States Judge Thomas Griesa finally authorized Citibank Argentina to process interest payments of bonds issued under Argentine law, with a payment deadline on March 31 and on June 30, and to exit its custody business in Argentina.

 “Griesa issued an order and said he won’t prevent Citibank from fulfilling its obligations to process interest payments of Argentine Law bonds,” Citibank Argentina said in a press release late last Saturday.

“At the same time, Griesa authorized Citibank to exit its custody business in Argentina, a process that will be done fulfilling all local regulations.”

The bank said its custody business represents two percent of the total income of Citi Argentina and that has “no meaningful connection” with banking business in general. At the same time, the bank said it hopes to continue “fulfilling a relevant role in the Argentine economy on the upcoming decades.”

Citibank said last Tuesday it plans to exit its custody business in Argentina as soon as possible, after a Griesa refused to lift an injunction that blocked the bank from processing interest payments on 2.3bn of Argentina bonds.

President Cristina Fernández warned on Friday that Citibank is obliged to pay bondholders despite Griesa’s ruling forbidding the bank to do so. During a rally, Cristina Fernandez said the Argentine government would protect the rights of bondholders and force the bank’s Argentine subsidiary to make the payments in accordance with local law.

Citibank was in the disjunctive of disobeying Thomas Griesa original decision and thus fall in contempt of court in the United States, or following the federal judge's decision and ignore Argentine law and be exposed to Argentine sanctions including the loss of its banking license.

Top Comments

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  • Voice

    Round, round, wheels going round, round, round
    Down, up, pedals, down, up, down
    But I got to back-pedal to the other side of town
    Before the sun goes down, heyeyey
    .....;-)))

    Mar 23rd, 2015 - 05:54 pm 0
  • Conqueror

    Interesting that NML has said that it reached an agreement with Citibank. Citibank wants to exit the 'custody' business. Perhaps it couldn't unless NML agreed. Mr Singer may still be calling the shots. The agreement only applies to Citibank.

    Mar 23rd, 2015 - 06:23 pm 0
  • Skip

    So Greisa gets what he wanta in the long run.
    Citibank finally doesn't have to deal with the Argentine government's mess.
    And Argentina has to find another bank.

    Can't wait to see how an Argentinean education sees this 'win'.

    Mar 23rd, 2015 - 07:41 pm 0
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