repurchase agreement

(redirected from Repo agreement)
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Related to Repo agreement: Repo transaction

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 ?
Each cash investor has a "rule set" governing the portfolio of collateral that is acceptable under its repo agreement.
Also assume that if only one of the two investors agrees to a repo, then the dealer stops operations and the investor that entered the repo agreement experiences a loss equal to [z.
The ratings on the notes issued by Cygnus Finance will, therefore, continue to reflect the credit quality of the reference credits, the level of credit enhancement provided by subordination and excess spread, and KBC Bank's ability to meet its payment obligations as counterparty under the credit default swap and repo agreement.
Monies not utilized under the repo agreement are invested in permitted investments.
The fund pursues its investment objective by investing in high-quality money market instruments and short-term debt including time deposits, certificates of deposit, sovereign bonds and notes, and repo agreements.
Federal Reserve has been more expansionary by buying government bonds and leaving them on its balance sheet, whereas the European Central Bank injects base money through repo agreements that continually expire.
government and corporate Repo Agreements, and their respective sponsor positions, providing deeper institutional investment intelligence for the corporate treasury sector.
Following the injection of RMB 290B into the financial system using reverse repo agreements yesterday, the PBOC announced that it would inject an additional RMB 180B through 14- and 28-day reverse repurchase agreements on Thursday.
The MPC at its meeting on Thursday said the initial seven-day repo agreements would be priced at 9.
Since Repo 105 was a more expensive source of financing compared to ordinary repo agreements, its usage was timed around the end of reporting periods.
Core funding of the institution comes from a diverse base of retail and corporate clients rather than repo agreements or other wholesale funding.
First, the number of decimals in the forward rate was changed from three to six in November 1997, which made it possible to enter into repo agreements for very short periods.