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Repo (Securities)

Repo (Securities)

A sale and repurchase of securities.

Overview of Repoisory

Overview of Repo

Under a repo transaction, customers can sell securities to UOB with a simultaneous agreement that UOB will repurchase the equivalent securities from the customer at a future date for a pre-determined price.

Product types include repo, reverse repo, and cross-currency repo.

Document(s) required:

  • Global Master Repurchase Agreement (“GMRA”)


Risks involved:

  • Market Risk
  • Interest Rate Risk
  • Credit Risk

Benefits

Access short-term funds with securities

Access short-term funds with securities

Lower cost of funding

Lower cost of funding

Transfer of securities reducing risk

Transfer of securities reducing risk

Balance sheet relief

Balance sheet relief

Quick execution and short turnaround

Quick execution and short turnaround

Flexible tenors for any liquidity needs

Flexible tenors for any liquidity needs

Repo and Reverse Repo

Rationale for Securities Seller

Rationale for Securities Seller

Entity selling securities to the other party for cash before repurchasing the equivalent securities at a future date

  • Gain access to short-term funding at a favourable rate
  • Finance long securities position by using repos
  • Cost of funding may be lowered depending on the quality of the securities

Ready to apply?

Ready to apply?

Leave us your details and we will get in touch with you as soon as possible. Alternatively, you may like to reach out to your Relationship Manager.

Frequently asked questions

What securities can be used in a repo transaction?
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Generally, among the Asian market participants, the widely used securities in repo transactions are sovereign credit (e.g. U.S. Treasuries and Agencies, European Sovereigns, Asian Sovereigns) and investment grade corporate bonds.

Additional information

Reverse Repo Illustration
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Reverse Repo Illustration

Reverse Repo Illustration

Structure schematics
  1. At inception, UOB is the securities purchaser, Investor is the securities seller
  2. At maturity, UOB receives cash including interest while Investor repurchases the securities. For longer term Repos, interest may be paid quarterly or semi-annually.

*Haircut will be the percentage of additional securities required. Amount of haircut usually depends on the type of underlying securities.

This is only an illustration, it does not constitute an offer or an invitation to offer or a solicitation or recommendation to enter into or conclude any transaction. Please contact UOB for more information.

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