Lead Articles:

Lead Articles:

La Nacion: “Citi asks that new bonds not be affected”

Clarin: “Citibank asks Griesa to exclude the ruling on Argentine bonds”

Ambito Financiero: “Citibank asks Griesa for clarification and
confuses the markets”



La Nacion
Citi issues a plea for the new bonds not to be affected
It gave a presentation in Griesa’s courtroom concerning the bonds
under local law

Friday,

By Florencia Donovan | LA NACION

Although hitherto, the payments of the Argentine debt which arose
after the default were not subject to the attacks by the so-called
vulture funds, Citibank, an entity which locally acts as a custodian
of various sovereign bonds presented a brief to the New York Judge
Thomas Griesa to request him to clarify that future bond payments
under national law could not be attached in the event of an
unfavorable ruling for the country.

The bank argues that if US justice were to attach the funds which the
entity must transfer to the Argentine exchange bond holders under
local legislation, such as the Boden, this would place if “at risk
under civil, regulatory and criminal law”, and that this measure would
place pressure on the bank which “far exceeded the limits of
jurisprudence of equality.”

According to the brief presented at the Southern District Court of New
York, the Citi referred to a previous incident when the judge ordered
an attachment on the flow of Boden 12 at the request of Kenneth Dart’s
EM Limited, which affected the Argentine branch of the bank, but which
ultimately remained without effect as these bonds were subject to
local law.

The Citi’s presentation generated a degree of concern in the market,
as so far local bondholders have not had to fear Argentine bonds being
attached. So much so that since Griesa’s ruling last November, the
Argentine law bonds have performed better than those issued under
international law. Those following the lawsuit over the debt in
default also considered that the presentation should have been made
once the Appeal Court ruling had been published, which must decide any
moment now whether it ratifies Griesa’s ruling or not, which he issued
to get the country to pay the vulture funds 1.33 billion dollars in
one single cash payment.

Adrian Consetino, the finance secretary yesterday said that the issue
posed by Citibank “has been resolved favorably in the past for
Argentina”, in regard to the Boden 2012. “We cannot see how Griesa
could affect the payments that Citibank needs to make to its client”,
he said.

And he said that it was “unthinkable” that a US judge “who doesn’t
even have the file, can tell an Argentine banking entity subject to
Argentine law and under the control of the Central bank whether it
must or not comply with its obligations to its client”,


CLARIN: “Citibank asks Griesa to keep the Argentine bonds out of the ruling”
It wants to know whether this will affect the payment of local debt.
This is close to the time when the Court is expected to rule.

By Ezequiel Burgo

Citibank yesterday requested in writing that judge Thomas Griesa
clarify whether the sentence he issued under US law will affect the
payments to holders of bonds issued under Argentine law. “Argentine
bond laws are not subject to litigation that led to the judge’s
sentence and the Citibank is not part of that litigation”, they argued
in a 24-page brief.

The bank has but one concern: if the Second District Appeals Court of
New York ratifies that Argentina discriminated between those who did
not enter the swaps, there are those who believe that this would open
a deluge of lawsuits in other parts of the world using the same
argument (the violation of the pari passu clause). Citibank argues
that this could not happen as Griesa’s ruling only applies in the US

The three judges of the New York Court of Appeals will have the last
word in the lawsuit between Argentina and the vulture funds. The
ruling is imminent. They will ratify (or not) the ruling passed by
Griesa last October 27. The judge maintains that Argentina must pay
the holdouts USD 1.33 billion. Also, he laid down a payment formula,
requiring the country to pay 100% and to whom the measure applies: the
Bank of New York Mellon (Argentina’s payment agent in the US) and
three more agents: DTC, Clearing Spring and Euroclear (Citibank
transfers to Euroclear the payments to foreign-based holders for the
Boden 2015).

In November 2012, Griesa said in a hearing that if any actor in this
chain had doubts on the scope of the ruling they should put this down
in writing. This is what the CIti did yesterday.

The attorney Marcelo Etchebarne points out that the Griesa ruling
could affect the Citibank payments to holders of the Boden 2015 in
Europe. Anybody affected could seek an attachment using the pari passu
argument. This is what Elliot Management did when it sought to attach
the Boden 2012 payments.

Yesterday, Finance Secretary Adrián Cosentino said that “this was
favorabely resolved for Argentina” and added that “we cannot imagine
how Griesa could affect Citibank’s payments to its clients”.

The Government believes that the bonds referred to by Citi in its writ
(discounts, Par and GDP units in pesos and dollars issued under
national law) are not covered by the pari passu clause.

The Court must bear in mind the briefs presented by all parties and
amicus curiae in favor of Argentina and the holdouts in order to issue
its brief. The final decision is expected to be imminent.


AMBITO FINANCIERO: “The Citibank has asked Griesa for clarifications
and confuses the markets”
• It requested that all bonds issued under Argentine law be exempt
from future rulings
• The Government explained that this issue had already been resolved

By: Carlos Burgueño

While both the Government and the vulture funds are awaiting the
results of the second instance ruling of the Appeals Court of New
York, a bank has sought to backtrack things to Griesa’s Court.
Citibank requested the New York judge to exempt from “future rulings
the bonds issued under Argentine law”, even though the case is no
longer in the hands of the judge who already issued his ruling
(negative for Argentina) last November and transferred the case to the
Court which is not in the process of resolving it.

According to the brief presented yesterday by the heaquarters of the
bank in the jurisdiction of New York which demanded clarification of
the situation, the Citibank believes that a possible ruling against
the National State would oblige the institution to incur in a crime by
withholding funds which ought to be paid as the Discount, Par and GDP
bonds come up for payment, as it is Argentina’s payment agents for
these bonds.
The firm Cleary Gotlieb Steen & Hamilton thinks that Citi’s move is
the result of a technical error, as it has made two key errors. On the
one hand, the case is no longer in Griesa’s jurisdiction but in that
of the Second Instance Appeals Court. Furthermore, the bonds in the
responsibility of the Citi are of “domestic jurisdiction (Argentina)
and not subject to New York City laws”, like other bonds which are in
the sights of the vulture funds and which led to the negative ruling
in first instance of Griesa.

The firm says that if the Citi had presented its brief before the
November ruling, it would have still been a mistake (as the bonds do
not have New York jurisdiction) but it would have made sense to get
Griesa to clarify this in order to put at rest the fears of the
bondholders looking to collect the payments made by the Argentine
Government. However, always according to the interpretation of the New
York judges representing the country, presenting the brief on
Wednesday was bad timing and furthermore out of the jurisdiction.

The Government was more measured in its reaction. In a release, the
finance secretary Adrian Cosentino considered that the issue posed by
Citibank “has been resolved favorably in the past for Argentina when
Elliot Management Corp (which belongs to Paul Singer’s NML Capital)
attempted a cautionary measure to prevent the payment of the Boden
2012 and that “or we imagine how judge Thomas Griesa could affect the
payment which Citibank has to make to its clients”.

The Ministry of Economy also underlined that currently the country
“has not contractual relationship with the banking entity, the
presentation it made was totally consistent with the arguments that
Argentina has been making in this case. Its arguments are consistently
and emphatically in favor of the country.

The local view is the Citibank did not make a technical error of
gravitude, but that this involves an administrative issue concerning
the internal handling of bonds to be paid to its clients, and thus it
needs a writ from the first instance circuit of New York which issued
a ruling in November explaining that this does not cover bonds issued
in domestic jurisdiction.

Griesa at the moment does not even have the file of the lawsuit
between Argentina and the vulture funds, which has passed in its
entirety to the second circuit, and thus could not tell any entity
operating in the country, such as the Citibank whether it should or
not comply with the payment of obligations to its clients concerning
the liquidation of Argentina sovereign bond titles issued under this
country’s jurisdiction.

Argentina has no doubt that the bonds referred to in Citibank’s
presentation, meaning the Discount, Par and GDP-linked bonds in pesos
and dollars issued under national law, are not covered by the pari
passu clause,” affirmed Cosentino yesterday.

Citibank is requesting Griesa to formally and legally exempt the
financial entity from any future ruling (which was actually taken in
November last) concerning the bonds issued by the country and which
the bank must pay under Argentine law. The Citibank headquarters in
New York require Griesa to clarify his situation in the face of “a
potential ruling against the National State which would oblige the
institution to incur in a crime by withholding funds which are not
governed by New York law”.
The Citibank mentions the lawsuit against Elliott Management Corp.,
belonging to Singer’s NML Capital, who at one point managed to attach
the Libertad Frigate in Ghana and is the main creditor making claims
in the New York Appeals Court for 100% of the debt in default. The
bank argues that its local branch is the custodian of the bonds
denominated under local law which will be paid in the country and
hence not part of the lawsuit in Manhattan.

Citibank said that it is seeking clarification as Griesa’s ruling
could expose them “to serious regulatory, civil and possibly criminal
risk for obeying the order of a court not recognized as valid in
Argentina”.