The difference between the general collateral rate (general repo rate) and the specific collateral rate (special repo rate):

s = r- R

Where: s is the repo spread; r is the general repo rate; R is the special repo rate (r ≥ R or s ≥ 0).

The repo spread is positive when the general repo rate is larger than the special repo rate and the collateral is said to be on special. The repo spread allows the holder of the collateral to earn a repo dividend (it equals the repo spread times the value of security such as a bond).