repurchase 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 ?
PA) have completed a pilot project to enhance the operational efficiency of repo agreements.
In March 2012, FASB therefore announced plans to revise the repo agreement standards.
In this case, the collateral provider and cash investor negotiate the repo agreement, which specifies the principal amount, interest rate, margin, term, and class of acceptable collateral.
1tn in outstanding repo agreements (see figures 2 and 3).
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 issuer of the repo agreement retains the securities concerned in the balance sheet for the entire lifetime of the transaction and values them in accordance with the accounting principles for trading assets or investment securities, respectively.
A repo agreement typically involves the transfer of securities in exchange for cash.
The leu declined after the central bank lifted a limit on the size of its repo agreement auctions.
To establish a tri-party trading relationship, a cash provider and a cash borrower execute a master repo agreement (MRA) that stipulates the key elements of their prospective tri-party repos, such as how a repo may be terminated and how margins will be maintained.
The program could be used to buyback shares currently pledged under the repo agreement with Sberbank, which could create additional support for the share prices.