Victoria Ivashina

Lovett-Learned Professor of Business Administration

Victoria Ivashina is the Lovett-Learned Chaired Professor of Finance at Harvard Business School. She is a Research Associate at the National Bureau of Economic Research, and a Visiting Scholar at the Federal Reserve Bank of Boston and the European Central Bank. She serves on the editorial boards of the Review of Financial Studies, the Review of Corporate Finance Studies, and the Journal of Financial Intermediation. Professor Ivashina received the Harvard Business School’s Berol Fellowship and Hellman Family Fellowship awards for research excellence.

Professor Ivashina’s research includes topics on credit availability and pricing, global banking operations, evolution of the leveraged loan market, impact of monetary policy, reaching-for-yield in the insurance industry, and value creation by private equity investors. Her research has been published in the top journals in Finance and Economics and is regularly cited in media outlets including The Economist, The Financial Times and The Wall Street Journal. She currently teaches Private Equity Finance in the Harvard Business School MBA and Executive Education Programs.

Professor Ivashina holds a Ph.D. in Finance from the NYU Stern School of Business, and a B.A. in Economics from Pontificia Universidad Católica del Perú. 

Journal Articles

  1. The Ownership and Trading of Debt Claims in Chapter 11 Restructurings

    Victoria Ivashina, Benjamin Iverson and David C. Smith

    What is the ownership structure of bankrupt debt claims? How does the ownership evolve though bankruptcy? And how does debt ownership influence Chapter 11 outcomes? To answer these questions, we construct a data set that identifies the entire capital structure for 136 companies filing for U.S. Chapter 11 bankruptcy protection between 1998 and 2009 and that covers over 71,000 different investors. We categorize the investors in the capital structure of bankrupt firms according to their institutional type and track them from the initial filing until the vote on the plan of reorganization. We document several novel facts about the role of different institutional investors, the impact of debt ownership concentration, and the role of trading in bankruptcy. We find that trading during the case leads to higher concentration of ownership, particularly among debt claims that are eligible to vote on the bankruptcy plan of reorganization. Active investors, including hedge funds, are the largest net buyers of claims in bankruptcy. While initial ownership concentration is important for coordination of a prearranged bankruptcy filing, it is consolidation of ownership during bankruptcy—and specifically consolidation of ownership of voting classes—that has an impact on the speed of restructuring, the probability of liquidation, and class-level as well as overall recovery rates.

    Keywords: ownership structure; distressed debt; trading in bankruptcy; Restructuring; Capital Structure; Insolvency and Bankruptcy; Ownership; Borrowing and Debt; United States;


    Ivashina, Victoria, Benjamin Iverson, and David C. Smith. "The Ownership and Trading of Debt Claims in Chapter 11 Restructurings." Journal of Financial Economics 119, no. 2 (February 2016): 316–335. View Details
  2. Dollar Funding and the Lending Behavior of Global Banks

    Victoria Ivashina, David S. Scharfstein and Jeremy C. Stein

    A large share of dollar-denominated lending is done by non-U.S. banks, particularly European banks. We present a model in which such banks cut dollar lending more than euro lending in response to a shock to their credit quality. Because these banks rely on wholesale dollar funding, while raising more of their euro funding through insured retail deposits, the shock leads to a greater withdrawal of dollar funding. Banks can borrow in euros and swap into dollars to make up for the dollar shortfall, but this may lead to violations of covered interest parity (CIP) when there is limited capital to take the other side of the swap trade. In this case, synthetic dollar borrowing becomes expensive, which causes cuts in dollar lending. We test the model in the context of the Eurozone sovereign crisis, which escalated in the second half of 2011 and resulted in U.S. money-market funds sharply reducing the funding provided to European banks. Coincident with the contraction in dollar funding, there were significant violations of euro-dollar CIP. Moreover, dollar lending by Eurozone banks fell relative to their euro lending in both the U.S. and Europe; this was not the case for U.S. global banks. Finally, European banks that were more reliant on money funds experienced bigger declines in dollar lending.

    Keywords: banks; global banks; credit supply; dollar funding; International Finance; Banks and Banking; Banking Industry;


    Ivashina, Victoria, David S. Scharfstein, and Jeremy C. Stein. "Dollar Funding and the Lending Behavior of Global Banks." Quarterly Journal of Economics 130, no. 3 (August 2015): 1241–1281. View Details
  3. The Disintermediation of Financial Markets: Direct Investing in Private Equity

    Lily Fang, Victoria Ivashina and Josh Lerner

    We examine twenty years of direct private equity investments by seven large institutions. These direct investments perform better than public market indices, especially buyout investments and those made in the 1990s. Outperformance by the direct investments, however, relative to the corresponding private equity fund benchmarks is limited and concentrated among buyout transactions. Co-investments underperform the corresponding funds with which they co-invest, due to an apparent adverse selection of transactions available to these investors, while solo transactions outperform fund benchmarks. Investors' ability to resolve information problems appears to be an important driver of solo deal outcomes.

    Keywords: financial intermediation; private equity; direct investment; co-investment; Private Equity; Entrepreneurship; Financial Markets;


    Fang, Lily, Victoria Ivashina, and Josh Lerner. "The Disintermediation of Financial Markets: Direct Investing in Private Equity." Journal of Financial Economics 116, no. 1 (April 2015): 160–178. View Details
  4. Cyclicality of Credit Supply: Firm Level Evidence

    Bo Becker and Victoria Ivashina

    Theory predicts that there is a close link between bank credit supply and the evolution of the business cycle. Yet fluctuations in bank-loan supply have been hard to quantify in the time series. While loan issuance falls in recessions, it is not clear if this is due to demand or supply. We address this question by studying firms' substitution between bank debt and non-bank debt (public bonds) using firm-level data. Any firm that raises new debt must have a positive demand for external funds. Conditional on issuance of new debt, we interpret firm's switching from loans to bonds as a contraction in bank credit supply. We find strong evidence of substitution from loans to bonds at times characterized by tight lending standards, high levels of non-performing loans and loan allowances, low bank share prices, and tight monetary policy. The bank-to-bond substitution can only be measured for firms with access to bond markets. However, we show that this substitution behavior has strong predictive power for bank borrowing and investments by small, out-of-sample firms. We consider and reject several alternative explanations of our findings.

    Keywords: Business Cycles; Borrowing and Debt; Credit; Banks and Banking; Bonds; Financial Markets; Financing and Loans; Banking Industry;


    Becker, Bo, and Victoria Ivashina. "Cyclicality of Credit Supply: Firm Level Evidence." Journal of Monetary Economics 62 (March 2014): 76–93. View Details
  5. Reaching for Yield in the Bond Market

    Bo Becker and Victoria Ivashina

    Reaching for yield—the propensity to buy riskier assets in order to achieve higher yields—is believed to be an important factor contributing to the credit cycle. This paper analyzes this phenomenon in the corporate bond market. Specifically, we show evidence for reaching for yield among insurance companies, the largest institutional holders of corporate bonds. Insurance companies have capital requirements tied to the credit ratings of their investments. Conditional on ratings, insurance portfolios are systematically biased toward higher yield, higher CDS bonds. This behavior appears to be related to the business cycle, being most pronounced during economic expansions. It is also more pronounced for the insurance firms for which regulatory capital requirements are more binding. The results hold both at issuance and for trading in the secondary market and are robust to a series of bond and issuer controls, including issuer fixed effects as well as liquidity and duration. Comparison of the ex-post performance of bonds acquired by insurance companies does not show outperformance but higher volatility of realized returns.

    Keywords: fixed income; Reaching for yield; financial intermediation; insurance companies; Insurance; Assets; risk management; Bonds; Investment Return; Investment Portfolio; Insurance Industry;


    Becker, Bo, and Victoria Ivashina. "Reaching for Yield in the Bond Market." Journal of Finance 70, no. 5 (October 2015): 1863–1902. View Details
  6. Combining Banking with Private Equity Investing

    Lily H. Fang, Victoria Ivashina and Josh Lerner

    Bank-affiliated private equity groups account for 30% of all private equity investments. Their market share is highest during peaks of the private equity market, when the parent banks arrange more debt financing for in-house transactions yet have the lowest exposure to debt. Using financing terms and ex-post performance, we show that overall banks do not make superior equity investments to those of standalone private equity groups. Instead, they appear to expand their private equity engagement to take advantage of the credit market booms while capturing private benefits from cross-selling of other banking services.

    Keywords: leveraged buyouts; private equity; banks and banking; banking industry; regulation; Private Equity; Leveraged Buyouts; Banks and Banking; Banking Industry;


    Fang, Lily H., Victoria Ivashina, and Josh Lerner. "Combining Banking with Private Equity Investing." Review of Financial Studies 26, no. 9 (September 2013): 2139–2173. View Details
  7. Securitization without Adverse Selection: The Case of CLOs

    Effi Benmelech, Jennifer Dlugosz and Victoria Ivashina

    In this paper, we investigate whether securitization was associated with risky lending in the corporate loan market by examining the performance of individual loans held by CLOs. We employ two different datasets that identify loan holdings for a large set of CLOs and find that adverse selection problems in corporate loan securitizations are less severe than commonly believed. Using a battery of performance tests, we find that loans securitized before 2005 performed no worse than comparable unsecuritized loans originated by the same bank. Even loans originated by the bank that acts as the CLO underwriter do not show underperformance relative to the rest of the CLO portfolio. While there is some evidence of underperformance for securitized loans originated between 2005 and 2007, it is not consistent across samples, performance measures, and horizons. Overall, we argue that the securitization of corporate loans is fundamentally different from securitization of other asset classes because securitized loans are fractions of syndicated loans. Therefore, mechanisms used to align incentives in a lending syndicate are likely to reduce adverse selection in the choice of CLO collateral.

    Keywords: Personal Finance; Performance; Markets; Banks and Banking; Debt Securities; Investment Portfolio; Financing and Loans;


    Benmelech, Effi, Jennifer Dlugosz, and Victoria Ivashina. "Securitization without Adverse Selection: The Case of CLOs." Journal of Financial Economics 106, no. 1 (October 2012): 91–113. View Details
  8. The Private Equity Advantage: Leveraged Buyout Firms and Relationship Banking

    Victoria Ivashina and Anna Kovner

    This paper examines the impact of leveraged buyout firms' bank relationships on the terms of their syndicated loans. Using a sample of 1,590 loans financing private equity sponsored leveraged buyouts between 1993 and 2005, we find that bank relationships are an important factor in explaining cross-sectional variation in the loan interest rate and covenant structure. Our results indicate that two channels allow leveraged buyouts sponsored by private equity firms to receive favorable loan terms. First, bank relationships formed through repeated interactions reduce inefficiencies from information asymmetry. Second, banks price loans to cross-sell other fee business. These effects are additive. A one standard deviation increase in both bank relationship strength and cross-selling potential is associated with a 17 basis point (5%) decrease in spread and a 0.4 point (7%) increase in the maximum debt to EBITDA covenant. This translates to as much as a 4 percentage point increase in equity return to the leveraged buyout firm.

    Keywords: Leveraged Buyouts; Private Equity; Banks and Banking; Financing and Loans; Interest Rates; Investment Return; Relationships; Banking Industry; Financial Services Industry;


    Ivashina, Victoria, and Anna Kovner. "The Private Equity Advantage: Leveraged Buyout Firms and Relationship Banking." Review of Financial Studies 24, no. 7 (July 2011): 2462–2498. View Details
  9. Institutional Stock Trading on Loan Market Information

    Victoria Ivashina and Zheng Sun

    Over the past decade, one of the most important developments in the corporate loan market has been the increasing participation of institutional investors in lending syndicates. As lenders, institutional investors routinely receive private information about borrowers. However, most of these investors also trade in public securities. This leads to a controversial question: do institutional investors use private information received in the loan market to trade in public securities? In this paper, we examine the stock trading of institutional investors that also hold loans in their portfolio. Specifically, we look at the abnormal returns on stock trades following loan renegotiations. By collecting SEC filings of loan amendments, we are able to identify institutional investors that had access to private information disclosed by the borrower during loan renegotiations. Our results indicate that institutional managers that participate in loan renegotiations consequently trade in stock of the same company and outperform other managers by approximately 8.8% in annualized terms in the month following loan renegotiation.

    Keywords: Stocks; Financing and Loans; Negotiation; Investment Portfolio; Investment Return;


    Ivashina, Victoria, and Zheng Sun. "Institutional Stock Trading on Loan Market Information ." Journal of Financial Economics 100, no. 2 (May 2011): 284–303. View Details
  10. Institutional Demand Pressure and the Cost of Corporate Loans

    Victoria Ivashina and Zheng Sun

    Between 2001 and 2007, annual institutional funding in highly leveraged loans went up from $32 billion to $426 billion, accounting for nearly 70% of the jump in total syndicated loan issuance over the same period. Did the inflow of institutional funding in the syndicated loan market lead to mispricing of credit? To understand this relation, we look at the institutional demand pressure defined as the number of days a loan remains in syndication. Using market-level and cross-sectional variation in time on the market, we find that a shorter syndication period is associated with a lower final interest rate. The relation is robust to the use of institutional fund flow as an instrument. Furthermore, we find significant price differences between institutional investors' tranches and banks' tranches on the same loans, even though they share the same underlying fundamentals. Increasing demand pressure causes the interest rate on institutional tranches to fall below the interest rate on bank tranches. Overall, a one standard deviation reduction in average time on the market decreases the interest rate for institutional loans by over 30 basis points per annum. While this effect is significantly larger for loan tranches bought by structured investment vehicles (e.g., CDOs), it is not fully explained by their role.

    Keywords: Leveraged Buyouts; Financial Crisis; Credit; Debt Securities; Financing and Loans; Interest Rates; Investment;


    Ivashina, Victoria, and Zheng Sun. "Institutional Demand Pressure and the Cost of Corporate Loans ." Journal of Financial Economics 99, no. 3 (March 2011): 500–522. View Details
  11. Bank Lending During the Financial Crisis of 2008

    Victoria Ivashina and David S. Scharfstein

    This paper documents that new loans to large borrowers fell by 47% during the peak period of the financial crisis (fourth quarter of 2008) relative to the prior quarter and by 79% relative to the peak of the credit boom (second quarter of 2007). New lending for real investment (such as working capital and capital expenditures) fell by only 14% in the last quarter of 2008 but contracted nearly as much as new lending for restructuring (LBOs, M&A, share repurchases) relative to the peak of the credit boom. After the failure of Lehman Brothers in September 2008 there was a run by short-term bank creditors, making it difficult for banks to roll over their short-term debt. We document that there was a simultaneous run by borrowers who drew down their credit lines, leading to a spike in commercial and industrial loans reported on bank balance sheets. We examine whether these two stresses on bank liquidity led them to cut lending. In particular, we show that banks cut their lending less if they had better access to deposit financing, and thus they were not as reliant on short-term debt. We also show that banks that were more vulnerable to credit line drawdowns because they co-syndicated more of their credit lines with Lehman Brothers reduced their lending to a greater extent.

    Keywords: Financial Liquidity; Financing and Loans; Credit; Borrowing and Debt; Financial Crisis; Banking Industry;


    Ivashina, Victoria, and David S. Scharfstein. "Bank Lending During the Financial Crisis of 2008." Journal of Financial Economics 97, no. 3 (September 2010): 319–338. View Details
  12. Loan Syndication and Credit Cycles

    Victoria Ivashina and David Scharfstein

    Cyclicality in the supply of business credit has been the focus of a considerable amount of research. This cyclicality can stem from shocks to borrowers' collateral, which affect firms' ability to raise capital if agency and information problems are significant (Ben S. Bernanke and Mark Gertler, 1989). Or it can stem from shocks to bank capital, which affects the supply of bank loans if agency and information problems limit the ability of banks to raise additional capital (Bernanke, 1983). In this paper, we examine cyclicality in the supply of credit in the context of modern forms of banking, often referred to as the "originate-to-distribute" model. In particular, we focus on the role of syndicated lending.

    Keywords: Business Cycles; Capital; Credit; Banks and Banking; Financing and Loans; System Shocks; Financial Services Industry;


    Ivashina, Victoria, and David Scharfstein. "Loan Syndication and Credit Cycles." American Economic Review: Papers and Proceedings 100, no. 2 (May 2010): 1–8. View Details
  13. Asymmetric Information Effects on Loan Spreads

    Victoria Ivashina

    The paper estimates the cost arising from information asymmetry between the lead bank and members of the lending syndicate. In a lending syndicate, the lead bank retains only a fraction of the loan but acts as the intermediary between the borrower and the syndicate participants. Theory predicts that private information in the hands of the lead bank will cause syndicate participants to demand a higher interest rate and that a large loan ownership by the lead bank should reduce asymmetric information and the related premium. Nevertheless, the estimated OLS relation between the loan spread and the lead bank's share is positive. This result, however, ignores the fact that we only observe equilibrium outcomes and, therefore, the asymmetric information premium demanded by participants is offset by the diversification premium demanded by the lead bank. Using exogenous shifts in the credit risk of the lead bank's loan portfolio as an instrument, I measure the asymmetric information effect of the lead's share on the loan spread and find that it has a large economic cost, accounting for approximately 4 percent of the total cost of credit.

    Keywords: Cost; Banks and Banking; Financing and Loans; Interest Rates; Capital; Investment Portfolio; Credit; Diversification; Risk and Uncertainty;


    Ivashina, Victoria. "Asymmetric Information Effects on Loan Spreads." Journal of Financial Economics 92, no. 2 (May 2009): 300–319. View Details
  14. Bank Debt and Corporate Governance

    Victoria Ivashina, Vinay Nair, Anthony Saunders, Nadia Massoud and Roger Stover

    In this paper, we investigate the disciplining role of banks and bank debt in the market for corporate control. We find that relationship bank lending intensity and bank client network have positive effects on the probability of a borrowing firm becoming a target. This effect is enhanced in cases where the target and acquirer have a relationship with the same bank. Moreover, we utilize an experiment to show that the effects of relationship bank lending intensity on takeover probability are not driven by endogeneity. Finally, we also investigate reasons motivating a bank's informational role in the market for corporate control.

    Keywords: Corporate Governance; Borrowing and Debt; Banks and Banking; Business and Stakeholder Relations; Governance Controls; Managerial Roles;


    Ivashina, Victoria, Vinay Nair, Anthony Saunders, Nadia Massoud, and Roger Stover. "Bank Debt and Corporate Governance." Review of Financial Studies 22, no. 1 (January 2009): 41–77. View Details

Working Papers

  1. Monetary Policy and Global Banking

    Victoria Ivashina and Falk Bräuning

    Global banks use their global balance sheets to respond to local monetary policy. However, sources and uses of funds are often denominated in different currencies. This leads to a foreign exchange (FX) exposure that banks need to hedge. If cross-currency flows are large, the hedging cost increases, diminishing the return on lending in foreign currency. We show that, in response to domestic monetary policy easing, global banks increase their foreign reserves in currency areas with the highest interest rate while decreasing lending in these markets. We also find an increase in FX hedging activity and its rising cost, as manifested in violations of covered interest rate parity.

    Keywords: global banks; monetary policy transmission; cross-border lending; Capital Markets; Globalization; Banks and Banking;


    Ivashina, Victoria, and Falk Bräuning. "Monetary Policy and Global Banking." NBER Working Paper Series, No. 23316, March 2017. View Details
  2. Covenant-Light Contracts and Creditor Coordination

    Bo Becker and Victoria Ivashina

    In 2015, 70% of newly issued leveraged loans had weaker enforcement features, called covenant-light or "cov-lite"; this is nearly a three-time increase in cov-lite issuance compared to a previous peak in 2007. We evaluate whether this development can be attributed to market overheating, increased borrower demand for cov-lite loans, or a rise in creditor coordination costs. The last hypothesis stems from the increasing involvement of nonbank institutions and, in particular, the rise of mutual fund participation in the leveraged loan market after the financial crisis. Based on the wider syndication, (narrower) skills, and diverse incentives of nonbank institutional lenders, optimal contracts between them and corporate borrowers likely involve fewer monitoring tools and weaker control rights. We evaluate these explanations of cov-lite contract provisions in a large sample of U.S. loans for the 2001–2014 period. Consistent with creditor-driven explanations for cov-lite issuance, we show that cov-lite prices compress as the prevalence of cov-lite rises. Time patterns in cov-lite issuance closely match inflows to institutional lenders, and at a given time, cov-lite loans are, overwhelmingly, those with the highest ownership by structured products and/or mutual funds. The number and share of structured products and mutual funds also impact the propensity toward other contractual features that influence when and how creditors have control. However, these factors are less relevant in explaining the strength of restrictions on indebtedness, liens, payments, or assets sales.

    Keywords: Credit Cycles; loan contracts; Debt Covenants; Contracts; Financing and Loans; Credit; Borrowing and Debt;


    Becker, Bo, and Victoria Ivashina. "Covenant-Light Contracts and Creditor Coordination." Swedish House of Finance Research Paper, No. 16-09, March 2016. View Details
  3. Pay Now or Pay Later? The Economics within the Private Equity Partnership

    Victoria Ivashina and Josh Lerner

    The economics of partnerships have been of enduring interest to economists, but many issues regarding intergenerational conflicts and their impact on the continuity of these organizations remain unclear. We examine 717 private equity partnerships and show that (a) the allocation of fund economics to individual partners is divorced from past success as an investor, being instead critically driven by status as a founder; (b) that the underprovision of carried interest and ownership—and inequality in fund economics more generally—leads to the departures of senior partners; and (c) the departures of senior partners have negative effects on the ability of funds to raise additional capital.

    Keywords: partnerships; venture capital; Leveraged Buyout; Venture Capital; Private Equity; Partners and Partnerships; Leveraged Buyouts;


    Ivashina, Victoria, and Josh Lerner. "Pay Now or Pay Later? The Economics within the Private Equity Partnership." Harvard Business School Working Paper, No. 16-119, March 2016. View Details
  4. Large Banks and the Transmission of Financial Shocks

    Vitaly Bord, Victoria Ivashina and Ryan Taliaferro

    We explore the role of large banks in propagating economic shocks across the U.S. economy. We show that in 2007 and 2008, large banks operating in U.S. counties most affected by the decline in real estate prices contracted their credit to small businesses in counties that were not affected by falling real estate prices. These exposed banks were also more likely to completely cease operations in unaffected counties. By contrast, healthy banks — those not exposed to real estate price shocks — were more likely to expand operations and even to enter new banking markets, capturing market share in both loans and deposits. On average, the market share gain of healthy banks relative to exposed banks was a standard deviation above the long-run historic average market share growth. This offsetting effect was stronger for counties with a larger presence of exposed banks, and it resulted in changes in market share composition that had lasting effects. However, the net effect was negative and counties with a larger presence of exposed banks experienced slower overall growth in deposits, loans, employment, and number of small business establishments. These effects persist for several years after the initial shock.

    Keywords: System Shocks; Banks and Banking; Banking Industry; United States;


    Bord, Vitaly, Victoria Ivashina, and Ryan Taliaferro. "Large Banks and the Transmission of Financial Shocks." Working Paper, November 2015. View Details
  5. Financial Repression in the European Sovereign Debt Crisis

    Victoria Ivashina and Bo Becker

    By the end of 2013, the share of government debt held by the domestic banking sectors of Eurozone countries was more than twice its 2007 level. We show that this type of increasing reliance on the domestic banking sector for absorbing government bonds generates a crowding out of corporate lending. For a given domestic firm, new debt is less likely to be a loan—i.e., the loan supply contracts—when local banks have purchased more domestic sovereign debt and when that debt is risky (as measured by CDS spreads). These effects are most pronounced in the period following the second Greek bailout in early 2010.

    Keywords: Credit Cycles; Sovereign debt; Financial Repression; Sovereign Finance; Greece;


    Ivashina, Victoria, and Bo Becker. "Financial Repression in the European Sovereign Debt Crisis." Working Paper, April 2014. View Details

Cases and Teaching Materials

  1. Qalaa Holdings and the Egyptian Refining Company

    Victoria Ivashina and Jeffrey Boyar

    Teaching Note for HBS No. 217-011

    Keywords: private equity; infrastructure; emerging markets; Africa; structuring and financing large projects; Financial Services Industry; Egypt;


    Ivashina, Victoria, and Jeffrey Boyar. "Qalaa Holdings and the Egyptian Refining Company." Harvard Business School Teaching Note 217-087, June 2017. View Details
  2. Qalaa Holdings and the Egyptian Refining Company

    Victoria Ivashina and Marc Homsy

    This case follows Qalaa Holdings, a successful Egypt-based private equity firm, and gives insight into the types of investments it pursued, its growth over time, and the limited partner base it had at hand. It also allows students to consider and debate whether the traditional private equity fund structure can be applied in Africa. In particular, the case focuses on one of Qalaa’s largest and most difficult greenfield infrastructure projects: Egyptian Refining Company. It tracks the project from its structuring stage in 2007, through the adverse periods of the global financial crisis and Arab Spring, until 2012. At this time, Hisham El-Khazindar, co-founder and managing director, had to decide on the fate of the project. While passionate about contributing to Africa’s development, he could not ignore the challenges: the sheer size and complexity of the project, the high financial stakes, and the region’s on-going unstable political environment.

    Keywords: private equity; infrastructure; emerging markets; Africa; structuring and financing large projects; Financial Services Industry; Egypt;


    Ivashina, Victoria, and Marc Homsy. "Qalaa Holdings and the Egyptian Refining Company." Harvard Business School Case 217-011, September 2016. (Revised November 2016.) View Details
  3. Blackstone and the Sale of Citigroup's Loan Portfolio Teaching Note

    Victoria Ivashina and David Scharfstein

    Keywords: private equity; restructuring; derivatives; bankruptcy; Credit Derivatives and Swaps; Private Equity; Restructuring; Insolvency and Bankruptcy; Banks and Banking; Banking Industry; Financial Services Industry;


    Ivashina, Victoria, and David Scharfstein. "Blackstone and the Sale of Citigroup's Loan Portfolio Teaching Note." Harvard Business School Teaching Note 214-040, October 2013. (Revised December 2013.) View Details
  4. Note on the Leveraged Loan Market

    Victoria Ivashina

    This note provides an introduction to the process of loan syndication and the evolution of the leveraged loan market. The note emphasizes the role of banks as loan originators and the evolution of the institutional investors' entry into the leveraged loan market. In particular, the note discusses the role and incentives of collateralized loan obligations (CLOs).

    Keywords: Financing and Loans;


    Ivashina, Victoria. "Note on the Leveraged Loan Market." Harvard Business School Background Note 214-047, October 2013. (Revised October 2015.) View Details
  5. Note on LBO Capital Structure

    Victoria Ivashina, Paul A. Gompers, Paul A. Gompers, Victoria Ivashina, Joris Van Gool and Joris Van Gool

    This note discusses the capital structure often found in LBO transactions. Although the specifics of each capital structure vary case by case, in any given year, there is a great deal of similarity in the capital structure of these buyouts. These similarities exist because debt structure is largely determined by the deal size and market conditions. The note summarizes historic trends and practices related to the debt structure in the buyout space.

    Keywords: leveraged buyouts; capital structure; Leveraged Buyouts; Capital Structure;


    Gompers, Paul A., Victoria Ivashina, and Joris Van Gool. "Note on LBO Capital Structure." Harvard Business School Module Note 214-039, October 2013. View Details
  6. Blackstone and the Sale of Citigroup's Loan Portfolio

    Victoria Ivashina and David Scharfstein

    The credit boom that preceded the 2007-2009 financial crisis led to several lending practices that exposed banks to large risks. In particular, when the financial crisis unraveled, there were several billion dollars' worth of leveraged buyout (LBO) loans that were meant to be syndicated but—due to full underwriting—had to be funded by the originating banks. The case protagonist is Bennett J. Goodman, a Senior Managing Director at Blackstone. Goodman evaluates the opportunity to buy a fraction of the leveraged loan portfolio being offered for sale by Citigroup. This case can be used as a vehicle for discussing details of leveraged financing. In particular, it illustrates the close connection between syndicated-lending-backed leveraged transactions and loan securitization, and provides a context for discussion of factors that led to the leveraged credit boom that ended in 2007. The case also provides in-depth details of the structure of the transaction and its underlying assets, and serves as a means for understanding and valuing alternative investment strategies pursued by private equity firms during the credit-market crisis. As a byproduct, students learn how to use credit default swaps (CDS), a market-based indicator, for valuation.

    Keywords: Restructuring; Private Equity; Insolvency and Bankruptcy; Credit Derivatives and Swaps; Financial Markets; Investment; Banking Industry; Financial Services Industry;


    Ivashina, Victoria, and David Scharfstein. "Blackstone and the Sale of Citigroup's Loan Portfolio." Harvard Business School Case 214-037, October 2013. (Revised November 2013.) View Details
  7. Oaktree and the Restructuring of CIT Group (B)

    Victoria Ivashina and David Scharfstein

    This supplement presents the actual terms of the rescue financing provided by a group of private investors to CIT. It is intended to be distributed at the end of the discussion of "Oaktree and the Restructuring of CIT Group (A)" (HBS No. 214-035) and can be used as background to reflect on the students' proposal of financing terms for the $3 billion rescue financing of CIT.

    Keywords: Private Equity; Restructuring; Financial Services Industry;


    Ivashina, Victoria, and David Scharfstein. "Oaktree and the Restructuring of CIT Group (B)." Harvard Business School Supplement 214-036, October 2013. View Details
  8. Oaktree and the Restructuring of CIT Group (A)

    Victoria Ivashina and David Scharfstein

    CIT's prepackaged bankruptcy marked the first time a major financial institution was able to successfully restructure and emerge from Chapter 11 bankruptcy, challenging conventional views that a financial firm could not survive bankruptcy proceedings as a going concern. A diverse group of private investors that had accumulated a large position in CIT in the period leading up to the restructuring played a central role in the success of this restructuring. The case protagonist is Rajath Shourie, Managing Director at Oaktree Capital Management. Shourie evaluates the opportunity to extend a $3 billion rescue credit facility to CIT, together with five other large creditors of the struggling bank. The decision takes place just one day after CIT was denied access to the Temporary Liquidity Guarantee Program (TLGP). This case provides a platform for discussing what constitutes a good attractive distressed target. (In parallel, students can gain in-depth insight into alternative financing models of corporate lenders, including banks and finance companies.) The second major component of the case concerns distressed debt investment strategies, and provides an illustration of turning an investment in public debt into a position of control over CIT's management and the restructuring process.

    Keywords: Debt Securities; Restructuring; Financial Services Industry;


    Ivashina, Victoria, and David Scharfstein. "Oaktree and the Restructuring of CIT Group (A)." Harvard Business School Case 214-035, October 2013. View Details
  9. Private Equity Valuation in Emerging Markets

    Paul A. Gompers, Victoria Ivashina and Timothy Dore

    This note provides an opportunity to understand how private equity investors need to adapt to emerging markets.

    Keywords: private equity; valuation; emerging markets; Finance; Private Equity; Valuation; Emerging Markets;


    Gompers, Paul A., Victoria Ivashina, and Timothy Dore. "Private Equity Valuation in Emerging Markets." Harvard Business School Technical Note 213-043, September 2012. (Revised June 2017.) View Details
  10. HCA, Inc. LBO Exit

    Victoria Ivashina

    This case discusses the events following the 2006 $33.2 billion buyout of Hospital Corporation of America (HCA) by a consortium of private equity firms, including Bain Capital, KKR, and Merrill Lynch's private equity arm. The case highlights some of the core features of private equity investing. The first objective of the case is to allow students to understand a range of issues associated with the process of exit through an initial public offering. Understanding the economics of leveraged recapitalizations— including leveraged dividend payouts to financial sponsors and the opportunistic 2011 repurchase of Merrill Lynch's $1.5 billion stake—is the second objective of this case. The case protagonist is the management of HCA.

    Keywords: entrepreneurship; finance; stockholders; dividends; Private Equity; Initial Public Offering;


    Ivashina, Victoria. "HCA, Inc. LBO Exit." Harvard Business School Case 813-056, November 2012. (Revised January 2014.) View Details
  11. Momentive Performance Materials, Inc.

    Victoria Ivashina and David Scharfstein

    After nearly violating its loan covenants in 2009, Momentive Performance Materials, backed by its financial sponsor Apollo Global Management, took a variety of actions to restructure its debt. The restructuring steps included an open market repurchase of publicly held notes; a notes exchange; a loan-covenant waiver; and, finally, an attempted loan amendment that sought to extend the maturity of the loan used to finance the Momentive buyout. This case allows students to see different debt-restructuring options in one setting. The case protagonist is a fund investment manager at a large hedge fund that holds 3 percent of Momentive's syndicated loan. The decision point in the case is whether the investor should vote to amend the loan. The perspective of the investor allows students to understand tensions underlying the restructuring process. The case serves as a vehicle for discussing contractual and institutional differences between public debt and syndicated loans, and challenges in the restructuring of such debt.

    Keywords: Restructuring; Financial Crisis; Borrowing and Debt; Private Equity; Financing and Loans;


    Ivashina, Victoria, and David Scharfstein. "Momentive Performance Materials, Inc." Harvard Business School Case 210-081, June 2010. (Revised November 2013.) View Details
  12. Rosetree Mortgage Opportunity Fund (TN)

    Victoria Ivashina and Andre F. Perold

    Teaching Note for [209088].

    Keywords: Financial Crisis; Crisis Management; Capital; Mortgages; Mergers and Acquisitions; Valuation; Borrowing and Debt; Cash Flow; Bids and Bidding; Financing and Loans; Restructuring; Financial Markets; United States;


    Ivashina, Victoria, and Andre F. Perold. "Rosetree Mortgage Opportunity Fund (TN)." Harvard Business School Teaching Note 210-065, March 2010. View Details
  13. Delphi Corp. and the Credit Derivatives Market (A)

    Stuart C. Gilson, Victoria Ivashina and Sarah Abbott

    In 2005, Jane Bauer-Martin, a hedge fund manager, is considering what she should do with the fund's large investment in the publicly traded bonds of Delphi Corp., a financially troubled auto parts supplier. Delphi is General Motor's key auto parts supplier, and, like GM, it is burdened with large pension and other retiree liabilities that threaten to push it into bankruptcy. Bauer-Martin is considering using various credit derivatives (credit default swaps, credit-linked notes, credit default swap indices, total return swaps, etc.) to hedge her position in Delphi debt, or to speculate on future Delphi bond prices.

    Keywords: Borrowing and Debt; Insolvency and Bankruptcy; Credit Derivatives and Swaps; Bonds; Financial Management; Risk Management;


    Gilson, Stuart C., Victoria Ivashina, and Sarah Abbott. "Delphi Corp. and the Credit Derivatives Market (A)." Harvard Business School Case 210-002, July 2009. (Revised July 2009.) View Details
  14. Rosetree Mortgage Opportunity Fund

    Victoria Ivashina and Andre F. Perold

    In December 2008, in the midst of the worst financial crisis since the Great Depression, Rosetree Capital Management was evaluating the purchase of a pool of U.S. residential mortgages. The firm had formed an investment vehicle to acquire troubled residential mortgages from banks and other motivated sellers. The idea was to purchase mortgage loans at a discount and to work with individual borrowers to restructure their debts. Performing mortgages could then potentially be resold in the secondary market. The case provides cash flow projections in various economic scenarios that are revealing of the economics of troubled mortgages and home foreclosure. Rosetree needed to decide whether and how much to bid for the loans.

    Keywords: Financial Crisis; Borrowing and Debt; Mortgages; Investment; Housing; Valuation; United States;


    Ivashina, Victoria, and Andre F. Perold. "Rosetree Mortgage Opportunity Fund." Harvard Business School Case 209-088, December 2008. (Revised March 2009.) View Details