Repurchase Price - GMRA Provision

2000 Global Master Repurchase Agreement A Jolly Contrarian owner’s manual™ Resources and navigation Resources: 2010 GMRA: Full wikitext · Nutshell wikitext Navigation 2000 GMRA Table of Contents · 1 · 2 · 3 · 4 · 5 · 6 · 7 · 8 · 9 · 10 · 11 · 12 · 13 · 14 · 15 · 16 · 17 · 18 · 19 · 20 · 21 · Schedule · Equities Annex: EA 1 · EA 2 · EA 3 · EA 4 · EA 5 · Buy/Sellback Annex · BSA 1 · BSA 2 · BSA 3 · BSA 4 · BNA 5 Index: Click ᐅ to expand: GMRA Paragraph 2(pp) in a Nutshell™ Use at your own risk, campers! 2(pp) Repurchase Price is the sum of the Purchase Price and the Price Differential, which in turn is calculated as Pricing Rate * Purchase Price * day count fraction. The Pricing Rate is the agreed “repo rate”. view template Full text of Paragraph 2(pp) 2(pp) “Repurchase Price”, with respect to any Transaction and as of any date, the sum of the Purchase Price and the Price Differential as of such date; view template Related agreements and comparisons Related agreements: Click here for the same clause in the 1996 MRA, when we get round to finding out the first thing about it. Comparison: Knowing and, really, caring very little about other kinds of repo agreement, we have nothing presently to compare the Global Master Repurchase Agreement with. Comments? Questions? Suggestions? Requests? Insults? We’d love to 📧 hear from you. Sign up for our newsletter.

Content and comparisons

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Summary

So the price at which you buy the bonds back is the price at which you bought them (the Purchase Price), plus the time value of your trade. Thus, the Seller in a repurchase Transaction retains the price risk of the bonds. If she sells at 100, for a month, with a Pricing Rate of 10% — bear with me: these numbers are not meant to sound realistic but to accommodate the JC’s well-documented struggles with arithmetic — then the Repurchase Price at the end of that month will be 100 + (10 * 30/360) = 100.833.

The Seller must repurchase the bond for 10.833 regardless of the market price at which the bond is trading at the time. Thus the bond functions like collateral for a loan of cash, which must be repaid with interest. Should the bond move in value against the cash repayment obligation, the Margin Maintenance provisions kick in to allow the parties, as they wish, to call for margin.

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General discussion

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See also

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