A standard, two-party repo (classic repo) where the party receiving cash (borrower) delivers securities to the cash provider (lender). In other words, the securities in question are delivered to the buyer (lender) or his designated custodial agent, who has no relationship with the repo seller (borrower). As opposed to a hold-in-custody repo, the lender of cash, in a bilateral repo, takes actual delivery of the collateral. This is the safest alternative for the investor (buyer), provided that the collateral is actually under his full control. However, because collateral need to be transferred across settlement systems, a bilateral repo is also the most costly alternative.

This type of repo is also known as a delivery repo or a deliver-out repo.