Argentina just pulled the most 'only in Argentina' thing ever on Citibank Argentina

Argentina just pulled a complete and total "Argentina" and sacked the head of Citibank in the country.

Citibank Argentina CEO Gabriel Ribisich has led the bank since 2013, but no more. The Argentine government said he was fired because he "ignored" local laws.

Citi has also been banned from the Argentine securities market.

All of you watching the drama that is the Argentine government versus a group of holdout hedge fund creditors may have seen this twist coming a mile away. Last month, Citi got in the middle of this truly epic knock-down-drag-out fight, and that was bound to result in some ugliness.

For your review:

A group of hedge funds led by Elliott Management's Paul Singer (and known as NML) have been suing Argentina for years for over $1.3 billion in sovereign debt dating back to 2001 - that amount is 100 cents on the dollar of their investment. Argentina has refused to pay that amount because over 90% of investors in the same debt took a haircut.

That refusal pushed Argentina into default last summer, but since then The Republic has been trying every trick in the book to force custody banks to defy a US judge's order and pay out all the investors but NML.

One trick was to "change" the legal jurisdiction of the bonds to Buenos Aires so an Argentine judge could deal with the matter. However, custody banks don't want to mess with Judge Thomas Griesa, the US judge, so that's not working out for Argentina.

That's where things got messy for Citi. The bank tried to play nice with The Republic and ask Judge Griesa if it could disperse funds to Argentina's investors. Neither Judge Griesa, nor NML were having that.

"NML and other creditors reached an agreement with Citibank, according to which Citibank agreed not to appeal the court's determination that the pari passu injunction covers all of Argentina's exchange bonds," NML said in a statement. "Judge Griesa approved this agreement, which applies only to Citibank and was specifically tailored to address the unique circumstances facing Citi Argentina after Citibank announced it was exiting the custody business in Argentina."

Those "unique circumstances" included threats of retaliation from the Argentine government. At the time it was not totally clear what retaliation meant, but the word thrown around by sources close to the situation was "draconian."

So Citi decided to pull up stakes and leave - politicians were talking about revoking the bank's operating license anyway. It said that in doing business in Argentina, it faced an "unprecedented international conflict of laws."

The problem is that Argentina wasn't having that either, though. High level politicians said the Citi would in no way get to leave The Republic.

Judge Griesa, then, seeing that these threats were getting serious, allowed Citi to pay investors so it could begin the process of leaving Buenos Aires (other custody banks were not allowed to pay, and as such the country remains in default).

"Argentina can make it [Citi's exit] a very difficult, long and drawn out process," said David Fernandez, a public finance lawyer at Buchanan, Ingersoll & Rooney told Business Insider. "But if somebody doesn't want to do the business, eventually they're going to find their way out of it."

Sure, but they might get a little bruised in the process.