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 comfort instead of a guarantee.
* * *
letter of comfort UK US noun [C] (plural letters of comfort) (also comfort letter)
► FINANCE a letter from a company that tells a bank that it supports a request for a loan made by one of its subsidiary companies (= one of the companies that it owns): »
The parent company withdrew its letter of comfort and the funding required to sustain the subsidiary.
► ACCOUNTING a letter from an accountant about a company that is selling shares for the first time, that states that the information in the company's accounts is correct: »
The function of the letter of comfort is to reduce the underwriters' liability risk resulting from a misleading prospectus.
Financial and business terms. 2012.