Boston, MA 09/29/2014 (wallstreetpr) – Financial services provider Citigroup Inc (NYSE:C) has got a temporary relief from a U.S. District Court paving the way for the company to make interest payment due on September 30 to the bondholders of Argentina. The company has been pointing out the regulatory issues and threats of even losing the license in case it fails to make $5 million worth of interest payment at the due date.
The court ruling was a much needed one for Citigroup Inc (NYSE:C) to make interest payment, Reuters reported. The company was facing a case in the U.S. District Court of Manhattan filed by a group of hedge fund led by NML Capital stalling the payment of interest due in September. In fact, the hedge fund group came down from its tough stance and appealed before the Judge Thomas Griesa to allow the American financial institution to make payment of $5 million towards interest due on September 30.
The Judge heard the arguments for over two hours and finally gave the permission to allow Citigroup to make the blocked payment. He has sought another hearing within 30 dyas to consider arguments in favor of Citigroup that it enjoyed exemption from the court ruling in relation to the Argentina bonds. The ruling would also make the next payment due on December 31 an easy one.
NML Capital, as well as, Aurelius Capital Management has failed to take part in Argentina’s last restructurings. These hedge funds has also rejected Argentina’s debt restructurings of 2005 and 2010 that resulted 92% of Argentina’s defaulted debt exchanged for a small part of their face value.
Clarification On Earlier Order
Lawyer for Citigroup Inc (NYSE:C), Karen Wagner, tried to take advantage of the clarification issued by the Judge Griesa on his earlier order. The Judge said that his earlier in favor of the creditors was mainly centered on bonds payable and governed by the laws of New York. Citigroup lawyer took a cue from this and urged the Judge to rule that the company was not subject to an injunction.
However, the Judge has refused to accede to the appeal and gave 30 days to the concerned parties to exchange information to settle the issue. The Judge said that he did not want to hear the interest payment due once again and urged the parties to resolve the issue.