Bank of New York Mellon found itself front and centre of Argentina's debt battle on Tuesday after the South American country stripped its authorization to operate there and bondholders seeking payment filed a lawsuit against the U.S. bank.
Reuters reports that BNY Mellon, a financial intermediary between the Argentine government and its bond investors, in June held onto a $539m interest payment owed to bondholders on the orders of a U.S. court.
The U.S. District Court in New York had ruled that Argentina could not pay creditors who accepted discounted restructured bonds under U.S. legislation unless it also paid the holdout U.S. investment funds that rejected bond swaps in 2005 and 2010.
The frozen coupon payment tipped Latin America's No.3 economy into its second default in little over a decade. The Argentine government argued it had met its debt obligations and urged holders of exchange debt to pursue BNY Mellon for payment.
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