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Who gets the periodic payments when an equity is sold on an repurchase agreement?
Repurchase agreements are a way of financing a security position. You have a collateralized loan where you give your security in exchange for cash. Let's say you have a 10 year Treasury note paying 3.5% while the 1-week repurchase rate is 0.5%. You loan the security to someone with a promise to repurchase it from them some time in the future. You  collect the 3.5% coupon and you pay the 0.5% interest. Clearly it makes no sense for someone to collect interest on money and also collect coupon payments. And for the counter-party it makes no sense to be not getting coupon payments and also to be paying interest. This how one website explains the process: During the transaction, any coupon payments that come due belong to   the legal owner, the "borrower." However, when this happens, a cash   amount equal to the coupon is paid to the original owner, this is   called "manufactured payment." In order to avoid the tax payment on   the coupon, some institutions will repo the security to a tax exempt   entity and receive the manufactured payment and avoid the tax ("coupon   washing") I find this unequivocal description to be the clearest During the life of the transaction the market risk and the credit risk   of the collateral remain with the seller. (Because he has agreed to   repurchase the asset for an agreed sum of money at maturity). Provided   the trade is correctly documented if the collateral has a coupon   payment during the life of the repo the buyer is obliged to pay this   to the seller.