Judge makes ruling but Argentina debt fight rages on
By Davide Scigliuzzo
NEW YORK, March 24 (IFR) - Citigroup may have narrowly avoided losing its operating license in Argentina, but bondholders are still between a rock and a hard place after the latest court ruling on Argentina's debt.
The US bank won a victory of sorts last week in New York, where a US judge is overseeing the decade-long legal battle between the sovereign and a group of holdout creditors.
The judge gave Citi the green light to facilitate two debt payments even as the US bank works to pull out of its role as local custodian of the Argentine-law bonds in question.
Judge Thomas Griesa had previously blocked any such payments unless Argentina also paid holdout creditors who refused to accept previous debt restructurings on the bonds they own.
Citi's choice had been: make the payments and fall afoul of US justice, or block the payments and risk losing the right to operate in Argentina.
While Griesa's ruling gets the bank off the hook for now, other entities - not to mention the investors themselves - remain stuck in a story that never seems even close to ending.
"Unlike prior similar orders, this order expressly excludes other institutions in the chain of payment," said one lawyer briefed on the matter.
"It seems that its purpose is more to get Citibank out of the middle than to facilitate payment to bondholders." Continuación...