NEW YORK, Sept 18 (Reuters) - Citigroup argued before a U.S. appeals court on Thursday it faces “a serious and imminent hazard” if it cannot process another interest payment by Argentina on $8.4 billion in bonds the country issued under local laws following its 2002 default.
The three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York is weighing an appeal by the bank to reverse a lower court’s injunction. That ruling bars payment to creditors who participated in two prior debt exchanges stemming from the default unless holdout creditors are paid at the same time.
Citigroup’s lawyer, Karen Wagner, said the bank will “undoubtedly” get another transfer of money from Argentina by Sept. 30 and that local law requires it to make payments that are currently blocked by a lower court injunction. She later added the bank would “obey the order” of the appellate court if it upholds the injunction.
One judge, Barrington Parker, voiced skepticism over Citigroup’s argument, saying: “I don’t know how you can seriously argue the Argentine law bonds aren’t covered by the injunction.”
Roy Englert, a lawyer representing holdout creditors, argued that the injunction’s definition of the bonds exchanged in 2005 and 2010 does not differentiate based upon on denomination or the law under which they were issued. (Reporting by Nate Raymond and Joseph Ax in New York; Writing by Daniel Bases and Noeleen Walder; Editing by Meredith Mazzilli)