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 the parent company aware of its intention to borrow; the parent also usually supports the application, giving, at least, an assurance that it intends that the subsidiary should remain in business and that it will give notice of any relevant change of ownership.

Accounting dictionary. 2014.

Look at other dictionaries:

  • 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 — 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 — noun <! 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… …   Wiktionary

  • 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 — (U.K.) Fin = letter of moral intent …   The ultimate business dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.