Repurchase Agreement

A repurchase agreement in finance is an agreement between a borrower and its lender whereby the borrower agrees to buy back (i.e., sell) its outstanding borrowings from the lender at a predetermined price, preferably below the market value of those borrowings at the time of the repurchase.

In order for a repurchase agreement to be effective, both the borrower and the lender must be satisfied with its terms.

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