repurchase agreement

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Related to Repo transaction: repo rate

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 ?
The repo transaction is based on a public note of KfW Bank Group (ISIN DE000A2LQSP7) amounting to EUR 10 million and a seven-day term with a negative interest rate of -0.5%.
With the US Treasuries in hand, State Bank LLC borrowed funds in a repo transaction with ING Bank N.V.
The DFM may now process requests for transfer of securities listed on DFM for Repo transactions between a Repo seller and a Repo buyer who have agreed on a repurchase agreement in accordance with DFM requirements, the statement added.
Each repo transaction submitted to GSCC by a broker was required to have an actual Netting System participant as the counterparty and had to be bound to a corresponding reverse repo transaction.
subsidiary, MFGUK, then repoed them back to MFGUK, which then initiated another repo transaction with the London Clearing House (LCH).
Banks' ratings have declined since the financial crisis, and if a corporate is entering into a repo transaction with a bank subsidiary, like a broker-dealer, that unit might have a credit rating that's even lower than that of its parent, Epstein said.
The amount of the loan in a repo transaction is often lower than the value of the posted collateral.
Summary: National Bank of Abu Dhabi and Abu Dhabi Islamic Bank executed the Gulf region's first sharia-compliant repo transaction, the two lenders said on Tuesday, in a move that will help mop up liquidity.
Lehman vetted the concept of a SFAS 140 repo transaction with its outside auditor, before the firm formalized a Repo 105 accounting policy and approved Repo 105 transactions for use by firm personnel (Examiner's Report, 2010, Vol.
If one party to the repo transaction fails, the other party can unilaterally terminate the transaction and keep the cash or sell the bond, depending on which side of the transaction that party has taken.
But what happens to the dealer's counterparty in the repo transaction? The counterparty (who may be another dealer) has just lent money at less than the risk-flee rate.