Sunday, March 22, 2015

Griesa authorizes Citibank to process interest payments

United States Judge Thomas Griesa authorized yesterday 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 yesterday in a press release late last night. “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 US$2.3 billion of Argentina bonds.

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

— Herald staff