The Judge had previously sentenced Argentina to pay holdouts full-amount on their bonds, and blocked payments to exchange bondholders until the country pays the so-called "vulture funds".

Friday, September 26, 2014

Griesa enables Citi to process one-off payment on US dollar-denominated bonds

NY district judge Thomas Griesa (file photo).

US District Judge Thomas Griesa has enabled Citibank to process a one-off payment on US dollar-denominated bonds issued under Argentine law, during a hearing held at Manhattan federal court.

Griesa today asked both the bank and holdout representatives to prepare a presentation in order to decide whether bonds issued under Argentine law must comply with his sentence or not.

In the meantime, Citibank was given a stay to make a one-off payment until Griesa decides on the issue. This leaves three months before the next payment by Argentina on December 31 for $262 million is due to litigate over the order.

Citibank had asked Griesa to reconsider or at least stay his July ruling barring the bank from processing the payments, including one for US$5 million due September 30.

The bank said it faces regulatory and criminal sanctions by Argentina if it cannot process the payment following the country's 2002 default.

Meanwhile, bondholders who did not participate in Argentina's past restructurings, including Elliott Management's NML Capital Ltd and Aurelius Capital Management, opposed reversing Griesa's July order.

The Judge had previously sentenced Argentina to pay holdouts full-amount on their bonds, and blocked payments to exchange bondholders until the country pays the so-called "vulture funds".