U.S. District Court Judge Thomas Griesa has granted a stay in a long-running debt case that allows Citibank to process a payment by Argentina to holders of restructured local-law government bonds, although he set another hearing in 30 days so holdout hedge funds can seek to reverse the decision and block future payments.
The stay allows Citibank’s Argentine subsidiary to avoid penalties that Buenos Aires has vowed to impose on the financial institution if it does not process a $5 million payment – made on June 26 – by Tuesday’s deadline.
Griesa had issued an order in July stating that his 2012 injunction barring Argentina from making payments on the restructured debt before settling with a small group of holdout hedge funds also applies to bonds governed by local law.
