Letter Of Moral Intent
Definition of 'Letter Of Moral Intent'A letter to a bank from a parent company whose subsidiary is applying to borrow money from that bank. While not legally binding, the letter indicates the parent company's intention to continue financially supporting its subsidiary (to not sell it or shut it down) in an attempt to reassure the lender that making the loan would not be an overly risky decision. |
|
Investopedia explains 'Letter Of Moral Intent'While a letter of moral intent serves as reassurance to a bank that a parent company is on-side with a loan application, it does not serve as a formal guarantee by the parent for the subsidiary. This letter also shows that the parent company is aware of its subsidiary having requested the loan and approves. |
Related Definitions
Articles Of Interest
-
Analyzing A Bank's Financial Statements
A careful review of a bank's financial statements can help you identify key factors in a potential investment. -
Breaking Down The Balance Sheet
Knowing what the company's financial statements mean will help you to analyze your investments. -
Sneaky Subsidiary Tricks Can Cloud Financials
Use consolidated financial statements to uncover a parent company's true performance. -
Countries With The Largest Shadow Markets
These nations have the largest informal economies relative to their respective GDPs. -
Some Thoughts On The Shadow Market
The "shadow market" is a broad-based moniker with both positive and negative connotations. -
Investing In Oil And Gas UITs
Unit investment trusts provide direct exposure to the energy sector, fueling better returns. -
Financial Companies Need A New Model
It may be time for the U.S. to adopt a model for financial companies that better deters risky financial behavior. -
An Introduction To Swaps
Learn how these derivatives work and how companies can benefit from them. -
The Basics Of REIT Taxation
The unique tax advantages offered by these investments can translate into superior yields. -
3 Types Of REITs For Your Portfolio
Learn the key features of three subcategories of equity REITs: industrial, multifamily and hotel REITs.
Free Annual Reports