UPDATE 1-U.S. judge not ready to rule on Argentine bond payments via Citigroup

martes 3 de marzo de 2015 18:15 GYT

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By Nick Brown

NEW YORK, March 3 (Reuters) - A U.S. judge on Tuesday said he would not yet rule on whether Citigroup Inc can process interest payments by Argentina on bonds issued under its local laws following the country's 2002 default.

U.S. District Judge Thomas Griesa told the lawyers for Citigroup and holdout investors in a hearing in New York that he would not issue a decision on Tuesday afternoon.

The hearing marked the latest courtroom tussle over whether Griesa has authority to block Citigroup's branch in Argentina from processing payments on bonds issued under the country's local laws.

Argentina defaulted in July after refusing to honor Griesa's court orders that it pay $1.33 billion plus interest to holdout bondholders when it paid holders of bonds swapped during the country's 2005 and 2010 debt restructurings.

While the injunction has been in place, Griesa has since last year allowed Citigroup to process three interest payments while holding off on a final determination on whether it can always do so.

On Tuesday he said: "The injunction does not just enjoin the Republic, but also the participants in the bonds. The issue before me is to decide whether Citibank is a participant."

Legal counsel for Citibank, Karen Wagner of Davis, Polk & Wardwell told U.S. District Judge Thomas Griesa that the injunction would put Citibank at risk of breaking Argentine law.   Continuación...