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Reverse Repo (Cash Investment)

Lend cash against securities as collateral. Earn secured short-term return on excess liquidity.

Liquidity & Collateral
Complexity
Basic
Deal Size
$50M - $5.0B
Typical Tenor
1-4 weeks
Scalability
Very High
#liquidity#investment#secured#money-market
Mini Map

Flow Types

Cash
Securities
Collateral

Transaction Timeline

Phase 1: Initiation(T+0)

Cash exchanged for securities collateral.

Use Cases

  • •Invest excess cash with secured return
  • •Money market fund portfolio management
  • •Central bank liquidity absorption
  • •Collateral acquisition for other trades

Problem Solved

Provides a secured, short-term investment option for excess liquidity with minimal credit risk.

Revenue Calculator

Model deal economics

$500M
$50M$5.0B
13 bps
5 bps200 bps
10 bps
0 bps

Projected Revenue

Gross Carry Income$325,000
Funding Cost($250,000)
Net Carry$75,000
Upfront Fees$0
Total Revenue$75,000
Annualized Return
3.0 bps
If Repeated Annually
$150,000

Revenue Sources

Carry Income

Repo Rate Income5-20 bps

Interest earned on cash investment

At Maturity

Fee Income

Regulatory Checkpoints

Collateral QualityBasel III LCR

HQLA collateral provides better LCR treatment.

Risk Flags

Counterparty DefaultMedium

Counterparty fails to repurchase; must liquidate collateral.

Mitigation:Overcollateralization, daily mark-to-market, credit limits.