Common use of Repo Rollover/Renewal Clause in Contracts

Repo Rollover/Renewal. A Repo Rollover/Renewal occurs when the account owner has an existing repo deal with a counterparty and then executes a NEW repo deal (contract) with the same counterparty however leverages the collateral already in place. The maturity date of the original repo and the settlement date of the new repo are the same. In order to roll the collateral and to prevent or limit security settlement the roll function can be instructed on the new repo. Essentially the repo collateral is extended by way of a new repo execution linking to the original instruction. The account owner will instruct the pertinent movement of both securities (if applicable) and cash. It is important to note that a Rollover/Renewal is a brand new repo contract. It simply allows for the collateral from a prior repo deal to be leveraged for the new repo deal without having to return and redeliver the collateral.

Repo Rollover/Renewal. ‌ A Repo Rollover/Renewal occurs when the account owner has an existing repo deal with a counterparty and then executes a NEW repo deal (contract) with the same counterparty however leverages the collateral already in place. The maturity date of the original repo and the settlement date of the new repo are the same. In order to roll the collateral and to prevent or limit security settlement the roll function can be instructed on the new repo. Essentially the repo collateral is extended by way of a new repo execution linking to the original instruction. The account owner will instruct the pertinent movement of both securities (if applicable) and cash. It is important to note that a Rollover/Renewal is a brand new repo contract. It simply allows for the collateral from a prior repo deal to be leveraged for the new repo deal without having to return and redeliver the collateral.