Letter-of-comfort Definition

(finance) A type of letter popular in the 1980s addressed to a lender giving some type of reassurance about the position of a borrower (prospective borrower). Such a letter is written by someone substantial such as a parent company or major shareholder, but is not a guarantee and usually not even a legally enforceable undertaking (making it in practice almost worthless, yet lenders at various times have found such letters comforting).