President says bank must ‘follow Argentine law’ President Cristina Fernández de Kirchner said yesterday Citibank is obliged to pay bondholders despite a New York federal court ruling forbidding the bank to do so.

Saturday, March 21, 2015

CFK: Citibank must pay

The president speaks in Calafate yesterday.

President says bank must ‘follow Argentine law’

President Cristina Fernández de Kirchner said yesterday Citibank is obliged to pay bondholders despite a New York federal court 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.

“Everyone, no matter who they are, must follow Argentine law in Argentina,” the president said yesterday speaking from El Calafate, in Santa Cruz province. “While they are in Argentina, Argentine law must be fulfilled.”

The president never mentioned Citibank specifically but there was little doubt about who she was referring to when she vowed that her government “will defend the rights of these bondholders who believed in Argentina in 2005 and 2010,” she said. The dates refer to the country’s two debt restructurings that were accepted by more than 93 percent of bondholders.

Citibank said Tuesday it plans to get out of the business of making bond payments for the country and transfer the responsibility to another entity.

The dispute goes back to Argentina’s 2001 default on US$100 billion worth of debt. Most bondholders agreed to debt-swap deals in 2005 and 2010 that drastically cut payments. But a group of US hedge funds demanded full payment and took the case to court.

The president insisted that the government “will make” banks “follow Argentine legislation, because that’s how it works in all of the countries around the world.”

The government has threatened to cancel Citibank Argentina’s operating licence if it refuses to process a March 31 interest payment, putting at risk the group’s retail banking business.

Ranked one of the world’s leading custodian banks, Citigroup portrayed itself as an innocent third party faced with the untenable choice of ignoring Griesa and being held in contempt of a federal US court, or putting its licence in jeopardy.

Its decision may hamper the government’s efforts to pay bondholders and return to global markets.

Quicker DNI

The president also introduced a new way of obtaining the new National Identity Document (DNI), via teleconference with Interior Minister Florencio Randazzo.

The new service, which will be launched in Buenos Aires City first, will allow residents to obtain a DNI within 24 hours.

—Herald staff with Télam