Letters of comfort meaning

For further details on the documents outlined below, please refer to Practice Note: Issuing debt securities—key documentation. Appointment of the arranger The issuer (Issuer) designates an arranger (Arranger) to set up the programme. The Arranger may additionally serve as a dealer or manager for later note issues under the programme. Responsibility —Issuer and Arranger. Appointment of the dealers The dealer(s) (Dealers) will enter into a dealer agreement with the Issuer and the Arranger. For a syndicated issue, the Dealers and the Issuer may also sign a subscription agreement. New dealers may be added to the programme after launch via a dealer accession letter. Responsibility —Dealers, Arranger and the Issuer. Appointment of the agents The Issuer will appoint agents to act on its behalf for the programme. These may include a fiscal agent (Fiscal Agent) or a trustee (appointed by the Issuer to represent the interests of the noteholders),...

Introduction Guidance on establishing a medium term note (MTN) programme is set out in Practice Note: Setting up an MTN Programme—timeline of process. This Practice Note concentrates on the steps for an issuance of notes (a drawdown) carried out under an MTN programme (the programme) once that programme has been put in place. Type of drawdown A programme will ordinarily provide for two forms of drawdown: a drawdown agreed between the issuer and a dealer (a dealer drawdown); and a drawdown agreed between the issuer and a group, or syndicate, of dealers (a syndicated drawdown). In addition, the programme will usually permit further dealers to accede to the programme, either as permanent members of the dealer panel or for the purposes of a single drawdown. Notification to dealer(s) The issuer then notifies the dealer(s) of its intention to draw down under the programme—this can be done by means of a term sheet or by way of an Initial...

What are tihe practical implications of the case? This ruling firmly reaffirms the UAE courts’ pro‑arbitration approach and sets out clear, practical pointers for those in construction and arbitration. Article 8(1) will be enforced strictly. A prompt jurisdictional challenge grounded in an arbitration agreement will usually prevail unless that agreement is null, void, or incapable of performance. Non‑signatory tactics will be closely examined. The court looks to the real legal and factual matrix, not the pleaded cause. If the entitlement arises from subcontract works, recasting it via employer acknowledgements will not bypass the arbitration clause unless those documents create a genuinely independent, unconditional duty to pay. Conditional guarantees and comfort letters may not trigger direct liability. Where payment undertakings are contingent on the main contractor’s non‑payment or tied to the main contract/subcontract machinery, they are unlikely to found a standalone claim against the employer. The decision reinforces the sequencing principle in construction disputes: resolve the subcontract account first, in the agreed forum, before...

The European Commission (the Commission) has, for the first time, sent informal guidance letters relying on its updated 2022 Notice on Informal Guidance (the 2022 notice). The letters examine how sustainability principles apply to co-operation arrangements in the transport industry. Beyond being the inaugural letters issued under the previously little-used 2022 notice, the APM comfort letter is also the first occasion on which the Commission has applied the 2023 revised Guidelines on Horizontal Co-operation Agreements (the 2023 guidelines) to a sustainability initiative. Sustainability agreements are described as 'any horizontal co-operation agreement that pursues a sustainability objective, irrespective of the form of the co-operation'. The 2023 guidelines openly permit sustainability agreements that may raise competition issues provided they deliver verifiable efficiency gains, are necessary to secure those efficiencies, confer benefits on consumers, and do not eliminate competition. Background: Informal Guidance and Sustainability In 2004, the EU overhauled its competition law enforcement framework and processes, shifting from a centralised notification and authorisation regime for agreements between undertakings to a self-assessment...

Banking & Finance—February 2025 case round-up Tactus Holdings Ltd (in administration) v Jordan and others [2025] EWHC 133 (Comm) Assignment of rights—permitted assignment—champerty rules The Commercial Court refused an attempt to replace the existing claimant, finding the alleged transfer of rights was invalid due to contractual bars and was champertous. Reading the SPA’s assignment provision strictly, the court concluded that the applicant, Chillblast Ltd, was not a permitted assignee. It also determined that Chillblast lacked a sufficient legitimate interest to support the transfer. The judgment offers clear guidance on the construction of anti-assignment provisions, the contemporary application of champerty principles, and the procedural hurdles for a ‘change of party’ in commercial litigation. For further detail, see News Analysis: Court construes contractual restrictions on assignment and considers champerty in refusing substitution of a claimant (Tactus Holdings Ltd (in liquidation) v Jordan)...

Purpose The verification exercise primarily serves to shield directors accountable for the contents of the offer documentation, by setting out the steps taken to verify the truth and accuracy of the information contained in the relevant document. In most cases, the process concludes with a written record—termed the verification notes—substantiating the statements included within the offer documentation. Who does what? In a recommended offer where the offeree board circular forms part of the offer document, the offeror's lawyers usually co-ordinate the verification, with the offeree's lawyers providing input on those sections for which the offeree directors take responsibility. Where a separate offeree board circular is produced, the offeree's lawyers will co-ordinate verification of that document. The lawyers work closely with their clients throughout, and directors often delegate duties to a committee. This delegation does not, however, remove the directors' ultimate responsibility for the contents of the offer documentation...

In-house lawyers This Practice Note outlines resources within the Banking & Finance module that an in-house banking and finance lawyer may find helpful. It is aimed at lawyers in banks and other financial institutions and covers: lending security guarantees and comfort letters on demand guarantees/bonds and letters of credit set-off and netting It also addresses specialist finance areas: acquisition finance asset finance Islamic finance project finance real estate finance trade and commodity finance debt capital markets derivatives structured products and securitisation Technology in banking & finance transactions and Sustainable finance and ESG are included. For fuller detail on restructuring, refer to the Restructuring & Insolvency module. This Practice Note also points to other useful Banking & Finance module resources for in-house lawyers, including current awareness and keeping up to date, and cross border. Please also see Practice Note: Regulatory resources for in-house banking and...

Guarantees A guarantee is a contract under which the guarantor agrees to be answerable for the principal’s liabilities to another party (the guaranteed party). Over time, the common law has evolved to afford substantial protections for guarantors. The central rationale for these protections is to ensure the guarantor has certainty about the amount, nature and terms of the obligations it is supporting, and to preserve the rights the guarantor acquires by giving the guarantee. For more information on guarantor rights, see Practice Note: Guarantor rights and how to defer them in guarantee documentation—no competition clauses. As these protections can prejudice a lender’s position, it is common practice for lenders to seek to exclude such rights in guarantee documentation...

Comfort letter-non-binding This specimen non-binding comfort letter is intended for use alongside a facility agreement, where the borrower’s parent company offers assurance to the lender in relation to the borrower’s financial commitments. 'letter of comfort' 'letter of responsibility' The purpose of a non-binding comfort letter is to give the addressee confidence that the issuer will support the obligations of a third party (in this instance, the borrower). Its purpose is not to guarantee performance but to indicate the parent’s present intentions regarding support. This template is drafted to avoid creating a legally enforceable duty for the provider; ie, it sets out a moral undertaking rather than a legal obligation. Whether a comfort letter is binding depends on its precise wording, assessed against the relevant background and circumstances. In most cases, a comfort letter contains only statements of intention or policy and, as such, carries no legal force. Accordingly, it operates as reassurance and guidance rather than a contractual commitment...

This Deed of guarantee and indemnity is executed on [ insert day and month ] 20[ insert year ] Parties 1 [ Insert name of Guarantor ], a company incorporated in England and Wales with registered number [ insert company number ], having its registered office at [ insert address ] ( Company A ); 2 [ Insert name of Guarantor ], a company incorporated in England and Wales with registered number [ insert company number ], having its registered office at [ insert address ] ( Company B ); Company A and Company B together (the Obligors ), and 3 [ Insert name of Lender ], of [ insert address ] (the Lender ). bACKGROUND (A) The Lender has extended facilities to the Obligors under a range of financing arrangements. (B) The Lender’s provision of those facilities to the Obligors, or to any of them, is conditional upon the Obligors executing this Deed for the benefit of the Lender...

[ To be printed on the headed paper of the Guarantor ] [ insert date ] To: [ insert name and address of the lender ] Dear [ insert full name of lender ] We make reference to the facility agreement dated [ insert date of facility agreement ] entered into by [ insert name of borrower ] (the Borrower) and [ insert name of Lender ] (the Lender), as it may from time to time be amended, novated, supplemented, restated or substituted in line with its provisions (the Facility Agreement)...