US judge finds no exception for Citibank's branch in Argentina in dispute over bonds

Associated Press

A federal judge in New York says Citibank cannot let its branch in Argentina process payments by the South American country to bondholders unless U.S. bondholders also are paid.

Judge Thomas Griesa's written decision Thursday came in the ongoing dispute stemming from Argentina's default in 2001 on $100 billion of debt. Lawyers for the bank and Argentina had argued that the bonds at stake were local and shouldn't be subject to his rulings.

Continue Reading Below

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 bonds worth less than a third of their original value. The swaps occurred in 2005 and 2010 after Argentina defaulted.

Lawyers did not immediately respond with comment.