Argentina Revokes Authorization for Officials at BNY Mellon

Tuesday, 26 Aug 2014 09:46 AM

 

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Argentina stripped authorization for two Bank of New York Mellon Corp. officials after the bank, acting as trustee for the nation’s debt, refused to distribute funds to creditors in compliance with a U.S. court ruling.

The resolution, dated Aug. 25 and signed by Superintendent Cosme Juan Carlos Belmonte and central bank President Juan Carlos Fabrega, says BNY Mellon “isn’t complying with its operational objectives,” according to an e-mailed copy from the central bank. The resolution revokes the authorization given to BNY’s local director, Maria de la Cruz Solares, and another official, Mariel Garcia Sturzenegger, for failing to provide local financing as the bank had “no active operations” since December 2012.

U.S. District Judge Thomas Griesa ordered BNY Mellon to retain a $539 million debt payment that Argentina deposited in June because the nation didn’t also set aside funds to pay a group of holdout creditors at the same time. Argentina defaulted on July 30 and last week President Cristina Fernandez de Kirchner sent a bill to Congress to remove the trustee in order to pay bondholders in local accounts. The resolution doesn’t mention the bank’s role in the blocked debt payment.

Ron Gruendl, a BNY Mellon spokesman, declined to comment when contacted by telephone.

BNY Mellon’s unit in London was sued by a group of Argentina’s euro bondholders including Kyle Bass’s Hayman Capital Management LP and George Soros’s Quantum Partners LP for not distributing the interest payment to creditors outside U.S. jurisdiction.

To contact the reporters on this story: Daniel Cancel in Buenos Aires at dcancel@bloomberg.net; Camila Russo in Buenos Aires at crusso15@bloomberg.net To contact the editors responsible for this story: Bradley Keoun at bkeoun@bloomberg.net Daniel Cancel, Dennis Fitzgerald

© Copyright 2014 Bloomberg News. All rights reserved.

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