LETTER OF AWARENESS Definition

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LETTER OF AWARENESS is a formal letter written to a lender, normally by a parent company, acknowledging its relationship with another group company and its awareness of a loan being made to that company. It is the weakest form of comfort letter. Such letters do not constitute a guarantee, but may nevertheless involve a significant moral commitment on the part of the writer.

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PURCHASE AND INSTALLMENT SALEBACK, in real estate, is a contract purchase of real property upon the completion of construction. The subject property is then immediately sold back on a long-term installment contract.

EARNINGS is a term that refers to the financial capacity of a corporation to make distributions to shareholders other than return of capital, e.g., dividends. See also RETAINED EARNINGS.

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