I HAVE HERE A PIECE OF PAPER SIGNED BY . . .
A bank making a loan to a group company (S) may ask parent company (P) to guarantee the facility. But instead of receiving a guarantee–under which P simply agrees to pay the amount of any default by S–the bank may get a letter from P containing vaguely worded assurances to support S and keep it within the group over the life of the loan.
This is called a comfort letter.
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