Hi All, when the investor is undertaking a repo transaction and has placed a bond with the counter party (cp), is the interest payments received by the cp or by the investor.
Thanks
The counterparty (reverse repo position) receives the repo rate as compensation for providing the short-term financing.
yes, that is correct. sorry for not being clear- i was asking about the bond coupon payments.
In the repo transaction legal ownership passes from seller to buyer and hence coupon is received by the buyer which then passes it to the seller after adjusting any interest depending upon the contract. In your case CP is the buyer.