Argentina warns Citibank 'must obey law' amid debt row

GMT 22:10 2015 Friday ,20 March

Arab Today, arab today Argentina warns Citibank 'must obey law' amid debt row

Argentine President Cristina Kirchner
Buenos Aires - AFP

President Cristina Kirchner warned Friday that banks operating in Argentina must obey its laws, amid a row over Citibank's refusal to defy a US court order blocking Buenos Aires from repaying its restructured debt.
Banks operating in Argentina "must obey Argentine laws, just like in every country. We're no different," Kirchner said.
She did not mention Citibank by name, but the comment was widely seen as a veiled reference to the US bank.
Citibank has been drawn into a bitter court battle between Argentina and two hedge funds that refuse to accept the country's bid to restructure the debt it defaulted on during its 2001 economic crisis.
US District Judge Thomas Griesa has blocked Citibank from processing payments to other creditors who agreed to take heavy losses on the face value of their Argentine bonds until the country settles its $1.3-billion dispute with what it calls the "vulture funds."
Kirchner's government, which has been forced into a new default by the ruling, has threatened to revoke Citibank's Argentine banking license if it does not process the payments.
Citibank pleaded with Griesa to let it handle payments on bonds issued under Argentine law, but he rejected the bank's request last week, threatening to hold it in contempt of court if it failed to comply.
Argentina's 2001 default on $100 billion in debt was the largest in history at the time.
In 2005 and 2010, the majority of the country's creditors agreed to take "exchange bonds" at a steep write-down. But the two US hedge funds, NML Capital and Aurelius Capital Management, sued for full payment and won.
"We will defend the bondholders who believed in us in 2005 and 2010," Kirchner said.
Citigroup said Tuesday it plans to exit its Argentine custody business "as soon as possible."

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