Manage Buy Sellbacks_Sell Buybacks

A buy sellback/sell buyback is the spot sale and forward repurchase of a security. During the term of a buy sellback/sell buyback, the underlying collateral security is pledged to the lender of money. The collateral is transferred in the name of the lender of money. That is, the borrower of the security in the depository system. Due to this process, the lender of money receives any coupon payments paid by the issuer during this period. These coupon payments however, belong to the borrower of money or, lender of the security, who provided the collateral. Therefore, the coupon payments and interest thereon is reduced from the outstanding liability or asset relating to the buy sellback/sell buyback. The net amount is settled upon the termination or maturity of the deal.
This article assumes you are familiar with the entity level elections that have been made for processing a buy sellback/sell buyback security.