letter of comfort

letter of comfort
<! possibly UK and AU only here A type of letter popular in the 1980s addressed to a lender giving some type of reassurance about the position of a borrower (or prospective borrower). Such a letter is written by someone substantial such as a parent company or major shareholder, but is not a guarantee and usually not even a legally enforceable undertaking (making it in practice almost worthless, yet lenders at various times have found such letters comforting).

Dear Sir, We confirm that we are aware of all the facilities which are presently made available by your company to Duke Securities Ltd (hereinafter referred to as the Company) and that you have our assurance that we will use our best endeavours to not permit the company to enter into liquidation (whether voluntary or compulsory) or to enter into any arrangement with its creditors without its liability to your company being completely discharged. &mdash; example letter of compfort (from Dukes parent company) quoted in , The Bold Riders, second edition, 1996, ISBN 1-86448-184-6, page 16


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  • letter of comfort — ˌletter of comˈfort noun letters of comfort PLURALFORM [countable] FINANCE a letter from a company to a bank in support of a subsidiary of the company that is asking for a loan; = COMFORT LETTER: • The bank may be content to be given a letter of… …   Financial and business terms

  • letter of comfort — noun (law) A letter sent by a person in authority to provide assurances about intended actions • • • Main Entry: ↑letter …   Useful english dictionary

  • Letter Of Comfort — A letter issued to a lending institution by a parent company acknowledging the approval of a subsidiary company s attempt for financing. The letter of comfort in no way guarantees the loans approval for the subsidiary company. It merely gives… …   Investment dictionary

  • Letter of Comfort — Ein Comfort Letter ist eine von einer Gesellschaft abgegebene Erklärung, die einen Sachverhalt, eine Analyse oder eine Prüfung bestätigt und so quasi beglaubigt. Comfort Letter von Wirtschaftsprüfungsgesellschaften Bei der Prüfung von… …   Deutsch Wikipedia

  • letter of comfort — A letter to a bank from the parent company of a subsidiary that is trying to borrow money from the bank. The letter gives no guarantee for the repayment of the projected loan but offers the bank the comfort of knowing that the subsidiary has made …   Accounting dictionary

  • letter of comfort — 1) A letter to a bank from the parent company of a subsidiary that is trying to borrow money from the bank. The letter gives no guarantee for the repayment of the projected loan but offers the bank the comfort of knowing that the subsidiary has… …   Big dictionary of business and management

  • letter of comfort. — See comfort letter. * * * …   Universalium

  • letter of comfort. — See comfort letter …   Useful english dictionary

  • letter of comfort — /ˌletər əv kʌmfət/ noun a letter supporting someone who is trying to get a loan …   Dictionary of banking and finance

  • letter of comfort — noun an assurance about a debt, short of a legal guarantee, given to a bank by a third party …   English new terms dictionary

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