Letter of Comfort

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Definition

A Letter of Comfort is 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 loan of the subsidiary company. It merely gives reassurance to the lender that the parent company is aware and approves of the situation. [1]


References

  1. ↑ BCBS, Report on intra-group support measures, February 2012
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