Letter of comfort
This term refers to the law of the country selected below.
What is a letter of comfort?
A letter of comfort is a means of securing a loan. It refers to a statement made by a person closely associated with the debtor (the patron) to the lender, promising to ensure the debtor’s solvency or fulfillment of obligations. In terms of content, a letter of comfort can range from a completely non-binding statement (soft letter of comfort) to a commitment to use funds for a specific purpose (i.e., a specific type of obligation) to a guarantee (→ hard letter of comfort). However, a letter of comfort does not directly improve the debtor’s equity position and has no impact on the debtor’s balance sheet.
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