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, where the collateral may be a Treasury security , money market instrument , federal agency security, or mortgage-backed security . From the purchaser (customer) perspective, the deal is reported as a reverse Repo .