repurchase agreement


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Related to repurchase agreement: repo rate, Reverse Repurchase Agreement

Repurchase agreement

An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. Also called a repo, it represents a collateralized short-term loan for which, where the collateral may be a Treasury security, money market instrument, federal agency security, or mortgage-backed security. From the purchaser's (customer's) perspective, the deal is reported as a reverse repo.

Repo

A practice in which a bank or other financial institution buys securities with the proviso that the seller must repurchase the same securities for an agreed-upon price on a certain day. Investors and financial institutions do this in order to raise short-term capital. A repo is also called a repurchase agreement or an overnight repo.

repurchase agreement (RP)

The sale of an asset at the same time an agreement is made to repurchase the asset at a specified price on a given date. Essentially, this process involves taking out a loan and using the asset as collateral. Also called repo. Compare reverse repurchase agreement. See also overnight repo.

repurchase agreement

An agreement to buy something back from the purchaser.This is encountered most often in two situations:(1) The thing purchased turns out to be less valuable than originally thought, such as when someone buys a promissory note, or a partial interest in a promissory note,and the obligor then defaults.(2) Especially with condominium units in facilities specializing in elder care, the seller of the units will agree to buy them back at a preestablished price if the owner dies or becomes so disabled as to require nursing home or similar care.

References in periodicals archive ?
Master repurchase agreement refers to the blanket agreement that governs an entity's agreement with its bank or counterparS and the wording in or structure of some of these agreements could cause the agreement to be deemed a loan to the bank rather than a purchase of securities from the bank.
Under this repurchase agreement, Teledyne will immediately purchase shares from a financial institution, which will purchase an equivalent number of shares on the open market over the term of the transaction.
Japanese and German government securities are also held under repurchase agreement through transactions executed directly in the market or through agreements with official institutions.
According to the repurchase agreement, RB Commercial Mortgage LLC, a subsidiary of NYMT, transferred Multifamily CMBS having an estimated aggregate market value of approximately USD116m to New York Mortgage Securitization Trust 2012-1, a special purpose entity, in exchange for the proceeds.