The “Purchase Price” is the price at which the “Buyer” under a Repurchase Transaction buys the underlying securities (the “Purchased Securities”). If a Repurchase Transaction were a loan, the “Purchase Price” would be the AMOUNT of the loan made by the Buyer to the Seller.
It is important to remember that the “Purchase Price” has NOTHING TO DO WITH THE MARKET VALUE OF THE SECURITIES. Rather, the “Purchase Price” is the amount that the Buyer is prepared to ‘lend’ the Seller (bearing in mind the value of the collateral which it is going to receive in return).
It won’t surprise you to learn that the “Purchase Price” is calculated on the “Purchase Date”.Contact Us