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Don't lie to me, Argentina

Hans Humes was fed up.

Hans Humes was fed up. Last September, Argentine President Néstor Kirchner's administration declared that it would pay just 25 cents on the dollar to holders of the country's defaulted bonds. Actually, analysts say, the offer is closer to 10 cents because, among other reasons, interest has never been paid on some of the debt. Money manager Humes's firm, New York­based Van Eck Global, happens to hold about $300 million of the bad bonds (see story, page 61).

Since Buenos Aires had defaulted on $90 billion of its $145 billion in public debt in December 2001, the largest default in history, the country's officials had at least appeared to be going through the (slow) motions of reaching an equitable accord with foreign bondholders. Now, fumes Humes, "Their consultations with investors appear to have been no more than a charade designed to keep us from uniting and aggressively pressing our case. Argentina simply wasn't listening."

So, to get some attention, Humes, 39, and Nicola Stock, an official of the Italian Bankers' Association, have formed the Global Committee of Argentina Bondholders. Since GCAB's January launch almost 500 institutional investors and retail investor groups -- including Bank of Tokyo­Mitsubishi, Commerzbank and Fidelity Investments -- have signed on; Humes and Stock now speak for two thirds of the foreign bondholders, whose investments were once worth about $37 billion.

Still, Humes, a Van Eck partner who runs a $500 million international bond fund, has no illusions about the struggle ahead. "We can't force Kirchner to negotiate," he says, "but we hope we can make it clear that if he doesn't, very few people will invest in Argentina in the future."