ReverseAn informal name for a reverse buyback contract. In the case of other banks, the name “revolving line of credit” is used to distinguish between “regular lines of credit” (situations in which the bank is not legally required to make advances) and “renewable lines” (situations in which the bank is legally required to make advances). This use is outdated, erroneous and could expose the bank to legal liability. Risk-adjusted returnA national organization of bank loans and credit managers. Buy-back contract (PR) A form of short-term secured borrowing in which a security is sold with simultaneous agreement in order to buy it back to the buyer at a later date. Purchase and sale agreements are simultaneous, but reservations are not. The sale is a cash transaction, while the buyback is a booking of appointments, as it is done on a future date. The seller/borrower pays interest to the buyer at an interest rate negotiated between the parties. The interest rates paid on deposits are short rates on the money market and have nothing to do with the coupon rate paid for the acquired instrument. Unofficially known as rest. Sometimes called classic repo to distinguish between these transactions and sales/buybacks. Any transaction in which a security is sold under a repurchase agreement is, from the seller/borrower`s point of view, a repot and, from the buyer/lender`s point of view, the opposite. Deposits and reverses are often used to finance investment purchases, especially by traders.
The covenantA provision of the loan agreement or settlement takes into account the rate or method used to determine the fees charged to users of the securities-financed facility. As a general rule, an interest rate pact promises that commissions will be adjusted if necessary to support the timely payment of interest and capital of bonds. Repositioning buyout agreementsA financing technology, which is often used by traders, promote speculation by using peer-off profit trading when billing rounds issued and extended. If an investor agrees to buy a guarantee with the intention of selling it quickly for a profit, price movements do not always prefer such speculation.