June 26, 2014 / 5:19 PM / in 4 years

BNY Mellon says no comment on Argentina bond payment

NEW YORK (Reuters) - Bank of New York Mellon on Thursday said it is investigating whether or not it has received a deposit from the Argentine government intended for creditors, which if sent on to investors would put it in violation of a U.S. judge’s orders.

“No immediate comment,” a BNY Mellon spokesperson told Reuters in response to Argentina’s Economy Minister Axel Kicillof saying on Thursday the government deposited the cash before a regularly scheduled coupon payment was due on June 30.

The bank is the largest custody bank in the world. It acts as a transfer agent for bondholders who participated in two prior restructurings stemming from Argentina’s 2001-2002 sovereign default and is specifically barred from delivering the payments by a U.S. court order unless certain conditions are met.

U.S. District Court Judge Thomas Griesa has ruled that Argentina could not pay exchange bondholders without also paying investors who did not participate in the restructurings. These holdout investors have sued Argentina in U.S. courts for better terms to the restructuring of the bonds governed by New York law.

Reporting By Daniel Bases; Editing by Chizu Nomiyama

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