Argentine president says Citibank must make bond payments despite US court ruling

BUENOS AIRES, Argentina – Argentine President Cristina Fernandez says the country will oblige Citibank to pay bondholders despite a New York federal court ruling forbidding the bank to do so.

During a speech Friday, Fernandez said the government would protect the rights of bondholders and force the bank’s Argentine subsidiary to make the payments in accordance with Argentine law.

Citibank said Tuesday it plans to get out of the business of making bond payments for the South American nation and transfer the responsibility to another entity.

The dispute goes back to Argentina’s 2001 default on $100 billion worth of debt. Most bondholders agreed to debt-swap deals in 2005 and 2010 that drastically cut payments. But a group of U.S. hedge funds demanded full payment and took the case to court.