UPDATE 4-Citigroup to stop Argentina bond payments amid turmoil
(Adds Aurelius filing, closing stock price)
By Jonathan Stempel
NEW YORK, March 17 (Reuters) - Citigroup Inc said on Tuesday it plans to exit its custody business in Argentina as soon as possible, after a U.S. judge refused to lift an injunction that blocked the bank from processing interest payments on $2.3 billion of Argentina bonds.
In a defeat for the bank, clients and Argentina itself, Citigroup said it made its decision in light of U.S. District Judge Thomas Griesa's March 12 order letting the injunction stand, and Argentina's renewed threats to strip its banking license and impose criminal, civil and administrative sanctions.
Citigroup may sell portions of the business or end some customer relationships, according to a letter to Griesa from Citigroup's lawyer, Karen Wagner.
The New York-based bank also again asked Griesa to put his order, which it hopes to overturn, on hold as it prepares to exit the custody business. Citigroup called itself the victim of an "unprecedented international conflict of laws."
Argentina's economy ministry had no immediate comment.
Citigroup's decision may further complicate Argentina's efforts to pay bondholders and return to global debt markets, more than 13 years after its 2001 default on roughly $100 billion of bonds.
Most investors holding Argentina bonds exchanged them for bonds worth much less, but a group of bondholder holdouts rejected the swaps. Continuación...