Boston, MA 09/23/2014 (wallstreetpr) – Citigroup Inc (NYSE:C)’s Argentina debt case is getting complicated as the deadline for interest payment remains due on September 30, 2014. In order to deal with the deadline hassle, the bank is planning to urge the U.S. judge to put on the hold, the order that bars it from processing payments on $8.4 billion bonds.
Citigroup Remains Struck; Troubles from All Sides
The Bank, in its petition, said that it shall face criminal and regulatory sanctions from Argentina, if the interest payment due for the bondholders, worth $5 million is not paid off by September 30, 2014.
The Argentina Economy Minister, Axel Kicillof yesterday warned the bank of severe penalties in case the payments were not made. The Government of Argentina, at present, is fighting to put at bay, the debt crisis from touching other kinds of bonds.
The Citigroup Inc (NYSE:C) lawyer, Karen Wagner told the U.S. District Judge Thomas Griesa, regarding its plans during the hearing scheduled for September 26, 2014. The bank had also filed its case with the federal appeals court regarding Judge Griesa’s injunction that led to the prohibition of payments.
The Injunction for Processing Payments
According to Judge Griesa, Citigroup Inc (NYSE:C) was prohibited from processing its payments for the bonds, which were issued under the Argentina Law. Also, in a different ruling in 2012, the Judge had ordered that Argentina needed to make a full payment for the rejected bond swaps in the year 2005 and 2010, to the U.S. investment firms.
As a result, Argentina had become a defaulter after the Judge froze a coupon payment worth $539 million on the bonds purchased under the foreign laws. Nevertheless, Citigroup Inc (NYSE:C) was allowed to pay a one-off on all local law bonds, to which the bank said that the ban on payments against local law bonds was not justified.
In the absence of payments being made by the bank, Argentina law would be broken, leading to penalties on Citigroup.