A repo (repurchase agreement), specifically an open repo, that which extends for longer periods that usual. It comes with an option to lengthen its maturity and hereby avail funding beyond its initial period. The two parties can keep getting the contract renewed, though it still can be ended with a specific time notice (such as 30-day notice). Examples of extensions include 15 and 18 months. The seller can exercise the option to extend the repo term either on any business day during the original term or only on specific business days over the course of the original term. The seller can also request an additional extension on the repurchase date.

The seller in an extendible repo agreement has the option to defer the repurchase date for an additional term as agreed by the parties, subject to a pre-defined short notice period (not longer than, or beyond, the conventional or mandated collateral settlement period, that is, T+0, T+1, or T+2). Both parties can, on the business day the notice for extension is served, request a change (reset) in the repo rate for the extended period (additional term to maturity). The repo collateral can also be substituted by the seller by means of a request on the same business day an extension notice is served, to substitute the collateral with an alternative acceptable to the buyer for the additional term to maturity.

Repo interest is to be paid on the original repurchase date, if the transaction is not extended, and/or on the final repurchase date, if the transaction is extended.