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Author: TMFKGOMalley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2201  
Subject: Re: repurchase agreement Date: 3/15/2002 10:27 AM
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Can someone either direct me to information on or provide a good explanation of how a repurchase agreement works?



Hi,

Definition:

Repo (Repurchase Agreement)
www.investorwords.com/cgi-bin/getword.cgi?4186
A contract in which the seller of securities, such as Treasury Bills, agrees to buy them back at a specified time and price. also called repurchase agreement or buyback.

Repos are very short-term secured loans disguised as a sale and repurchase agreement. In a typical repo, the borrower "sells" government securities to a borrower, with an agreement to purchase them back the next day for a slightly higher price. A term repo may run as long as 30 days.


For more details:

Repurchase and Matched-Sale Transactions
www.banx.com/banx/keymkts/repo.htm


Keith O'Malley
TMF KGOMalley


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