canadiananalyst

look at it this way:

new UST gets issued. a dealer ends up short the issue for whatever reason and has to make delivery or he will fail. the UST issue happens to be in short supply since investors want to own the new issue. Since the UST is in short supply and the dealers need to buy the issue or they will fail, the issue is considered on special or hot. You come along and happen to own some. the dealer is willing to give you a repo (lend you money) for a lower rate or even sometimes a close to zero rate in order to get their hands on the collateral you have.