A comfort letter is a document prepared by an accounting firm assuring the financial soundness or backing of a company.
A comfort letter may also be used as written assurance by a subsidiary's parent company or bank used to offer 'comfort' to the buyer as to the seller's ability or willingness to perform its obligations.
Comfort letters are often used because the seller is unable or unwilling to provide a guarantee on a certain outcome, such as the performance of a security.
[3] Comfort letters are typically signed prior to the pricing decision or closing date for a given public offering or other transaction, as a part of the due diligence process.
[citation needed] The European Commission also adopted a practice of issuing ad hoc written "comfort letters" in its Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak published in April 2020.