Clearstream's Argentina Arrangements Restructured Following Citi Exit

Clearstream has been appointed a new custodian by Argentina’s regulatory authority, and restarted securities and internal bond settlement in Argentina following Citibank’s decision to pull its custody business in the country.

On Tuesday, the National Securities Commission (CNV) appointed Caja de Valores, Argentina’s domestic central securities depositary (CSD), as Clearstream’s local custodian to substitute Citibank Argentina.

Earlier this week, Clearstream temporarily suspended settlement in Argentine securities and bonds in order to finalize the arrangements with Caja de Vaolres.

On Wednesday, Clearstream announced it would resume internal and external settlement instructions for all Argentine securities, except for certain afflicted Argentine government bonds. On Thursday, it reinstated internal settlement of certain Argentinian government bonds, however the CNV must approve any transaction before it is processed in the local market. Furthermore all external settlement for the afflicted remains closed. 

Citi chose to close its sub-custody business in the country after it was caught in a legal battle between the Argentinian government and a group of New York-based hedge funds that have sued Argentina in a U.S. District Court. Last month, U.S. District Jude Thomas Griesa ruled that Citi’ couldn’t make interest payments to local bondholders on sovereign debt until the Argentine government pay the hedge funds , sparking Citi’s decision to exit the custody business in the country.

Caja de Valores has been appointed to administer Citibank’s accounts and process the corresponding debt payments.