Argentina has asked Bank of New York Mellon to resign as its
trustee, the latest salvo in what has turned into a protracted
headache for the trust bank.
In an advertisement published Monday in The Washington Post,
Argentina said it has sent BNY Mellon a letter formally requesting
the bank to immediately hand in its resignation because it is no
longer eligible to serve as Argentina's trustee.
Last month, Argentina's central bank revoked the New York
company's authorization to operate an office in the country. Before
that, a group of hedge funds holding Argentine government bonds
sued BNY Mellon in London over interest payments they are owed by
the Argentine government, whose payment was blocked by a U.S. court
order. BNY Mellon, whose job has been to collect interest payments
and distribute them to investors, has been caught between
fulfilling its obligations as Argentina's trustee bank and obeying
a U.S. court order.
Argentina in July defaulted on $539 million of interest payments
due July 30, after U.S. District Judge Thomas Griesa ruled the bank
couldn't pass Argentina's funds onto investors holding Argentina's
restructured debt until the country pays hedge funds holding out
for payment on bonds defaulted on in 2001.
Monday, Argentina said if BNY Mellon doesn't resign, the
bondholders and Argentina are both entitled to remove the bank as
trustee and appoint another trustee as BNY's successor. It said
that given that BNY Mellon no longer has a trustee or office in
Buenos Aires, it is no longer eligible to be Argentina's
trustee.
"BNY Mellon has consistently followed the binding court orders
that govern its actions as trustee in this matter," said a
spokesperson for the bank.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
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