The Republic of Argentina and the Province of Buenos Aires have defaulted on their debt. This means that interest and retirement benefits of approximately 100 billion US Dollars will be no longer be generated. About 12,5 billion Euro of the bonds are held by mostly German investors, and were acquired in accordance with German legal contracts. The extent of the payment adjustment is the largest seen in the recent history of the financial world.

In addition, the situation is being handled in a confusing way. The Argentinean government, the International Monetary Fund IMF, and other organizations have not been able to prove that they are capable of providing effective crisis management and a solution to the situation. This was the decisive point that led to the formation of the First German Society of Bond Holders on 10.01.2002 founded as a private initiative. Currently the society is a registered association that represents the interests of the private investor.

In a typical case scenario, Argentina would have hired an Investment bank to conduct a debt exchange and remunerated the charges. Private investors would have been presented with an offer from this bank. The offer would have involved a reduction in the value of the sovereign bonds (a "haircut"). Compared with the consensus opinion of analysts prevalent in the papers for a number of months, that one has to expect a reduction in the value of the sovereign bonds up to 80%, a haircut of "only" 40% would have then posed an almost acceptable solution. The afore mentioned debt exchange plan could have been quickly brought to successful completion.

Unfortunately for the Aregentinean people and banks, a change in government at the end of December 2001 interrupted this process. The ruling party of Argentine President De la Rua and the Argentine Economy Minister Domingo Cavallo have already planned on the debt exchange with the foreign bond owners.

At that time, it was possible to gather information and build contacts with the help of the First German Society of Bondholders. As a result of the changed political climate in Argentina, however, it is no longer possible for private investors to effectively negotiate in this situation. We know our rights and choices and we will assert them, to have our money returned to us. All owners of Argentinean bonds are from now on encouraged to become involved with our cause, and are invited to become part of our Association. Our success has been also unique in the younger history of finance and will improve and strengthen the role of the private investor in international financial world. Let's do it!