Sale and Repurchase
From Open Risk Manual
Definition
Sale and Repurchase. (Repo) It is an alternative to a loan by which a finance provider enters into a sale and repurchase agreement for the products or financial assets being financed. The finance provider acquires title to the products or financial assets concerned at the commencement of the transaction and reverses the process at a future date. The parties may include a margin to protect against the diminution in value during the life of the transaction.
