Repurchase Agreement
Categories: Muni Bonds, Bonds, Regulations
Think: very short-term debt instruments.
That is, things like T-Bills and other government forms of debt paper are sold—and then bought back the next day. The annualized interest rates on these instruments is usually very small, but the instruments are very liquid. So people use these agreements to pay short term bills and take care of large corporate projects for short periods of time.
It's the fruit fly of the securities kingdom.