U.S. judge say Citi can make one-time Argentine bond payment

NEW YORK (Reuters) - A U.S. judge on Monday said Citigroup Inc could make a one-time interest payment on Argentina bonds governed by that country's law, and which are held by creditors that participated in the country's prior debt restructurings.

Denying a request by bondholders that did not participate in the restructurings to block the payment, U.S. District Judge Thomas Griesa in Manhattan cited the bank's inability to distinguish between those bonds and others that Argentina issued this year in a settlement with Repsol SA.

"The court does not wish to upset the settlement with Repsol," Griesa wrote.

The ruling clears the way for Citigroup to make a onetime interest payment on bonds creditors exchanged during the restructurings governed under Argentine law and dominated by U.S. dollars.

Holdout creditors had sought to block Citigroup from distributing the $85 million (£50.05 million) the bank said it had received from the country.

(Reporting by Nate Raymond in New York; Editing by Chris Reese)