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Citibank Argues Bond Rulings Don’t Apply to Argentina Branch
May 23, 2013
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CITIGROUP INC- $50.53 USD
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Citigroup Inc. (C), whose Citibank unit is the local custodian for some holders of Argentine bonds, asked a U.S. judge to make clear that it isn’t affected by his order barring payments to holders of restructured debt unless holders of defaulted bonds are also paid.
Citibank yesterday asked U.S. District Judge Thomas Griesa in Manhattan for a ruling clarifying earlier decisions in a case against Argentina led by Elliott Management Corp.’s NML Capital. Citibank, which said its Argentina branch is custodian for bonds issued under that country’s laws that are to be paid within Argentina, isn’t a party to the NML suit.
Griesa, who is overseeing litigation over Argentina’s defaulted debt, issued an order in November requiring the nation to pay NML and other holders of the defaulted bonds before paying investors who exchanged their bonds for new ones, at a sharp discount, in debt restructurings in 2005 and 2010.
Citibank said it is seeking clarification because Griesa’s rulings may expose it to “grave regulatory, civil and possible criminal risk for obeying a court order not recognized as valid in Argentina.”
The case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net; Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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