Also known as a "repo" or sale and repurchase agreement. Typically undertaken in the context of securities, or sometimes mortgage loans, an arrangement under which a security, a loan, or other asset is sold by Party A to Party B with a corresponding agreement by Party B to sell the asset back to Party A for a specified price, often on a specified date.

Substantively, a repo is a secured loan disguised as a sale. The seller is essentially the borrower and the buyer is essentially the lender in the transaction, holding the securities or loans it has "bought" as collateral for the "loan." The assets are repurchased on a certain date or within a certain time period.

The 'interest" payment (or repo rate) is equal to the difference between the repurchase price and the original sale price. The most common form of securities repo agreement used in the US is the master repurchase agreement (MRA) published by SIFMA. For a more detailed discussion of repos, see Practice Note, Repos: Overview (US).