It stands for letter of comfort; a final statement that a certified public accountant (accounting firm) issues to the underwriters, declaring no indication of false or misleading information in the financial statements (generally, in a registration statement) being submitted in connection with a securities offering (that is, as part of a prospectus). Such a declaration is made to the best knowledge of the accounting firm.
The letter of comfort is issued on the effective date, and is usually followed by an updated letter at the closing date.
This statement is also known as a comfort letter.
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