EFTA Document EFTA01385345

3 January 2018 HY Corporate Credit HY Multi Sector.Media. Cable & Satellite normally detrimental for existing operators. Over the course of the next two years, most of the incremental supply will be opening in the Atlantic Coast market. And while the supply additions are significant with the SALT deductions in place we fear it could get a lot worse should SALT be eliminated which is currently the plan. Over the course of the last 10 years, the Atlantic Coast market has seen the number of slot machines grow dramatically. While that growth started in 1993 with the introduction of Foxwoods in Connecticut, it was not until 2004 that capacity additions began to proliferate in a dramatic way with the introduction of the first VLT casinos in upstate New York (Saratoga, Finger Lakes, Fairgrounds, and Monticello). Soon thereafter, in 2006, supply stepped up with the opening of Empire City and Vernon Downs in New York, coupled with the first two casinos in Pennsylvania (Mohegan Sun and Parx Casino). Since then, Pennsylvania, Maryland, Massachusetts, New York, and even Atlantic City have added capacity to the market. Regional gaming developments to come online in 2018 and 2019 include the Rain Rock Casino (Yreka, CA), Four Winds South Bend (South Bend, IN), Resorts World Catskills (Catskills, NY), Point Place Casino (Bridgeport, NY), MGM Springfield (Springfield, MA), Tiverton Casino (Tiverton; RI), Wynn Boston Harbor (Everett, MA), and Live! Hotel & Casino (Philadelphia, PA). We believe that Foxwoods and Mohegan Sun will be the operators that will suffer the most cannibalization from new supply. We note that a study submitted to both operators by Pyramid Associates in 2015 estimated that the GGR displacement related to MGM Springfield, Wynn Boston Harbor and Resorts World Catskills during their first full year of operations should account for 24% of Mohegan's GGR and 28% of Foxwoods' GGR. The same study estimates that the ramp up of these casinos should further cannibalize GGR by an additional -13.6% at Mohegan and -16.9% at Foxwoods three years post opening. For further details on this study, please refer to: futos://aoo.al/GST2o2. Fa hil:it 5: Recent Elnd Upcoming Casino Openings Property Realm Slots Tables Opening del Lego Resort & Casino Tyre, NY 1,956 99 2/1/I7 Kansas Crossing Pittsburg. KS 625 16 3131/17 Rivers Casino Schenectady, NY 1,150 67 2/8/17 Jake's 58 Casino Islandia, NY 1,001 2/27/17 Baha Mar Resort Nassau. Bahamas 1,100 119 4/21/17 Rani Casino Ridgefield. WA 2.500 75 4/24/17 Spokane Tribe Casino Airway Heights. WA 450 12 12/29/I7 Rain Rock Casino Yreka, CA 500 8 1/29/18 Four Winds South Bend South Bend. IN 1.800 01'18 Resorts World Catskills Catskills. NY 2,150 100 3/1/18 Point Place Casino Bridgeport. NY 475 20 02'18 Hard Rock Atlantic City Atlantic City. NY 2,400 130 Jul'18 MGM Springfield Springfield. MA 3.000 100 Sep'18 Tiverton Casino Tiverton: RI 1.000 32 Ocil 8 Wynn Boston Harbor Everett, MA 3.241 168 6/3/19 Livel Hotel & Casino Philadelphia, PA sear coavwvAsnor Diursawe Sore 2O30 125 04'19 Of importance, our supply outlook excludes the possible JV between Mohegan Tribe & Mashantucket Tribe, the opening of satellite casinos in Pennsylvania and the reopening of Revel in Atlantic City given the timing uncertainty related to those developments. Page 70 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086629 CONFIDENTIAL SDNY_GM_00232813 EFTA01385345