Argentina warns Citibank it could lose banking license if it doesn't pay bondholders

Associated Press

The Argentine government is warning Citibank that it could lose its license in the South American country if it follows the order of a U.S. judge.

The Ministry of Economy said Friday that it has to process payments to bondholders or lose its license. The warning came a day after U.S. District Judge Thomas Griesa told Citibank it cannot let its Argentine branch process payments to bondholders unless U.S. bondholders are paid as well

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It's part of an ongoing dispute stemming from Argentina's default in 2001 on $100 billion of debt.

The judge has repeatedly ruled that U.S. hedge funds must be paid roughly $1.5 billion they are owed if Argentina pays interest to other bondholders who swapped their bonds for sharply discounted bonds.