Argentina deposits $161 million with local trustee to handle financial obligations on bonds

Argentina has removed a New York bank as custodian for bonds held by many of its bondholders and deposited $161 million with a local trustee to handle interest payments.

The move comes one day after a U.S. judge issued a contempt of court ruling against Argentina, warning it against the move that was in the works for several weeks.

The Economy Ministry says the money was deposited Tuesday into two accounts of the state-run Nacion Fideicomisos S.A., replacing The Bank of New York Mellon.

U.S. District Judge Thomas P. Griesa found Argentina in contempt on Monday for defying his orders requiring that U.S. hedge funds holding Argentine bonds be paid the roughly $1.5 billion they're owed if most of the South American nation's bondholders are paid interest on their bonds.