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Letter of Comfort

A completed parent-company comfort letter supporting a subsidiary's banking relationship while expressly avoiding a guarantee or primary payment obligation.

Jurisdiction: England and Wales - completed fictional worked example

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Important: This sample provides general legal information only and is not legal advice. Check the law, prescribed forms and signing requirements that apply to your exact jurisdiction and circumstances before use.

# LETTER OF COMFORT

Date: 29 November 2029

Parties: Ashdown Group plc and Wessex Bank plc

## 1. Parties, transaction and definitions

To Wessex Bank plc: Ashdown Group plc writes regarding the £4,000,000 revolving facility proposed for its wholly owned subsidiary Ashdown Logistics Limited. Ashdown presently owns 100% and expects to retain control while the facility is outstanding.

## 2. Commercial scope and consideration

Ashdown is aware of the subsidiary's business plan and expects, based on current information, to continue making management and treasury support available in the ordinary course. This records present intention and information only.

## 3. Performance, approvals and records

This is not a guarantee, indemnity, surety, undertaking to pay, charge, letter of credit or assumption of the subsidiary's debt. Ashdown does not promise to fund every loss, meet a shortfall or ensure that the subsidiary pays the bank.

## 4. IP, confidentiality and data

Ashdown will notify the Bank if it ceases to control the subsidiary or becomes aware of a material change making these statements materially misleading. It does not undertake to prevent disposal, dividend or borrowing; the facility remains subject to its credit documents.

## 5. Term, termination and transition

The Bank may use this letter for credit assessment and may disclose it only to advisers, regulators, funders or a permitted transferee on confidentiality terms. Nothing changes the facility, creates a third-party enforcement right or waives the subsidiary's defences.

## 6. Risk allocation and remedies

The Bank should obtain its own legal advice on comfort and guarantee. Ashdown confirms no reliance is intended beyond the express words, and confidentiality survives while information remains confidential.

## 7. England and Wales law and signatures

England and Wales law governs and the courts have exclusive jurisdiction. This letter expires on repayment or cancellation of the facility and is signed by Eleanor Price, Group Finance Director, without authority beyond its express terms.

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