US Court dismisses Citibank appeal over Argentina bond interest payment

Citi Building Sign

Citibank, which told judges this week that Argentina is holding a gun to its head over a $5 million bond interest payment due September 30, faces the possibility the trigger may be pulled as the court threw out its appeal of an order barring it from forwarding the payment.

Bloomberg News reports that the U.S. Court of Appeals in Manhattan Friday dismissed Citibank’s challenge of the July 28 order, sending it back to the judge who rejected a bid to make the payment, and setting up a conflict with the South American nation that could result in the loss of its local branch.

Citibank claims Argentina has threatened civil and criminal sanctions, including the possible nationalization of Citibank Argentina, if it fails to pass the interest payment to holders of $8.4 billion in U.S. dollar-denominated bonds issued under Argentine law and payable locally.

The dismissal leaves in place the order by U.S. District Judge Thomas Griesa that blocks the unit of New York-based Citigroup Inc. from forwarding payments if Argentina keeps refusing to pay a group of hedge funds led by Paul Singer’s Elliott Management Corp. that holds Argentina’s defaulted debt.

Hit the link below to access the complete Bloomberg News article:

Citibank Goes Back to Judge Who Blocked Argentina Payment

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