repo agreement

repo agreement
Repo is short for a repurchase agreement or a sale and repurchase agreement where one party sells a security to another party for cash and agrees to repurchase it on a specified date for a specified price. The interest rate implied from this "lending" transaction is the repo rate. They are commonly used in the financial markets for secured lending.
USA
Typically undertaken in the context of securities or mortgage loans, an arrangement under which a security, a loan or other asset is sold by Party A to Party B with a corresponding agreement by Party B to sell the asset back to Party A for a specified (higher) price. The assets are repurchased on a certain date or within a certain time period, usually within a year of the original sale so as to qualify for the safe harbor from the automatic stay in section 559 of the Bankruptcy Code. A repo is essentially a loan disguised as a sale, with the interest rate equal to the difference between the repurchase price and the original sale price. The seller is essentially the borrower and the buyer is essentially the lender in the transaction, holding the securities it has "bought" as collateral for the "loan."

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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  • repo agreement — atpirkimo sandoris statusas Aprobuotas sritis kredito ir finansų įstaigos apibrėžtis Sandoris, kuriuo viena šalis (pardavėjas) įsipareigoja parduoti ar įkeisti finansines priemones ar pinigus kitai šaliai (pirkėjui), o ši sumoka pirkimo kainą, ir …   Lithuanian dictionary (lietuvių žodynas)

  • reverse repo agreement — atvirkštinis atpirkimo sandoris statusas Aprobuotas sritis išvestinių finansinių priemonių rinka apibrėžtis Sandoris, kuriuo viena šalis (pirkėjas) perka ar priima įkaitu finansines priemones ar pinigus iš kitos šalies (pardavėjo), o ši… …   Lithuanian dictionary (lietuvių žodynas)

  • repo — An agreement between a seller and a buyer, usually in U.S. government securities, in which the seller agrees to buy back the security at a later date. Also: repurchase agreements Chicago Board of Trade glossary An informal name for a repurchase… …   Financial and business terms

  • Repo — A agreement in which one party sells a security to another party and agrees to repurchase it on a specified date for a specified price. See: repurchase agreement. The New York Times Financial Glossary * * * ▪ I. repo re‧po 1 [ˈriːpəʊ ǁ poʊ] noun… …   Financial and business terms

  • repo — re·po / rē ˌpō/ n pl repos 1: repurchase agreement 2: repossession Merriam Webster’s Dictionary of Law. Merriam Webster …   Law dictionary

  • Repo — may refer to:* Repurchase agreement, a financial instrument * The repossession of collateral for a defaulted loan * A Software repository, a stockpile of software assets such as binaries and source code available on the internet * Repo! The… …   Wikipedia

  • agreement — a‧gree‧ment [əˈgriːmənt] noun [countable] 1. an arrangement or promise to do something, made by two or more people or organizations: • Under the agreement, the company will distribute our products in North America. • What happens if the warring… …   Financial and business terms

  • repo participant — Under Title 11 U.S.C. Section 101: (46) The term repo participant means an entity that, at any time before the filing of the petition, has an outstanding repurchase agreement with the debtor. United Glossary of Bankruptcy Terms 2012 …   Glossary of Bankruptcy

  • repo — ☆ repo [rē′pō ] n. pl. repos 1. Slang something repossessed 2. an agreement by a seller, as of securities, to repurchase in the near future at an agreed upon price …   English World dictionary

  • Repo Rate —    A simple interest rate calculation to determine how much interest is to be added on to the second leg of a repo transaction.    ► See also Repurchase Agreement. * * * repo rate UK US noun [C] (also repo) INFORMAL ► FINANCE, STOCK MARKET,… …   Financial and business terms

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