EFTA01385351.pdf

3 January 2018 HY Corporate Credit HY Multi Sector.Media. Cable & Satellite For your convenience, we have summarized the gaming and land concession expiry dates in Exhibit 12. 'Exhibit 12: Expiry dates of gaming and land conccss cr,s Caner/ Gerning Expiry Property Land Expky Galaxy Jun-22 Galaxy Macau 2034 MPEL Jun-22 Studio City 2026 Altira 2031 City of Dreams 2033 MGM China Mar-20 MGM Grand 2031 MGM Cotai 2037 Sands China Jun-22 Sands Macau 2028 Venetian Macau 2032 Four Seasons 2032 Parisian 2032 Sands Cotai Central 2035 SJM Mar -20 Grand Lisboa 2033 Grand Lisboa Palace 2038 Wynn Macau Jun-22 Wynn Macau 2029 Wynn Cotai 2037 $0 -ere Co.yrw Renill•M Dana* &rot Tighter Junket Regulations. Given that junket operators have played an important role in the resurgence of VIP play, we believe that there is some concern regarding new junket regulations. We remind investors that on the 2018 policy address Macau's Chief Executive announced that regulators would attempt to draft "guidelines to hold specific audits on the problems found" during an ongoing general audit of Macau's junkets. These new regulations would include a review on the minimum internal control requirements in terms of information technology and a closer look into temporary deposits accepted by the operators. According to Paulo Chan, director of the Gaming Inspection and Coordination Bureau, these new requirements are expected to be implemented from January 2018, when local gaming regulators reviews applications for new and renewed licenses. In our view, these new regulations will have a minimum impact on the VIP market given that the 5 big junkets (-85% of the market) in Macau can easily cope with these regulations owing to the scale of their operations. Progress on Regional Infrastructure. Away from investors concerns, we believe that the completion of ongoing infrastructure projects could significantly boost visitation to Macau. Please refer to Exhibit 13 for further details on important infrastructure development. Looking into the mid-term, we believe that the opening of the Hong Kong-Zhuhai-Macau Bridge would be a significant positive for the market. We remind investors that this bridge aims to connect Hong Kong, Zhuhai, and Macau and, as such, reduce substantial transportation costs and time for visitors. The bridge, which will consist of a -42km structure and a -6.7km underwater tunnel, was initially expected to open in 2016. However, numerous technical difficulties have affected its construction, resulting in various delays and budget increases. E <hibit 13: Macau Infrastructure Developments Predicts Locndons Opining LRT (Taipa/Cotail Extends from the eastern coastal corridor and connects 2019.2020 on the north-east boundary with Taipa. HK -Macau Bridge h is a 42km channel to connect Hong Kong. Macau and Thuhai. Late 2018 The 40-km link will connect Thither airport with Guangzhou-Thuhai Rail Gongbei Port via Hengqin Island. 2018 Sane Caroni !Minx en Deusaw Sew Page 76 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086635 CONFIDENTIAL SDNY_GM_00232819 EFTA01385351