repurchase agreement (redirected from Repurchase and Reverse Repurchase Transactions)
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.