BUENOS AIRES, March 22 (Reuters) - Citigroup Inc has
been authorized by a U.S. judge to process two Argentine debt
payments, the bank said, which could ease tensions between the
bank and the default-hit nation.
The U.S. bank, which acts as custodian of some Argentine
bonds, has been embroiled in a court battle between the South
American country and a group of New York-based hedge funds
seeking full payment on their defaulted sovereign bonds.
U.S. District Judge Thomas Griesa had ruled that the hedge
funds must be paid in full before any payments to the large
majority of investors who accepted significant writedowns on
their debt holdings.
The Argentine government, meanwhile, threatened to cancel
Citibank Argentina's operating licence if it refused to process
payments to other bond holders, leaving Citi in limbo with a
plan to exit the custodian operation.
However, a potential resolution may have moved closer after
a ruling by the Southern District Court of New York on Friday.
The court has stipulated that it will not restrict Citi from
meeting its payment processing obligations relating to
dollar-denominated Argentine bond payments due on March 31 and
June 30, the bank said in a statement.
(Reporting by Nicolas Misculin; Writing by Anthony Esposito;
Editing by David Goodman)