"We are confident that the design of Studio City, a cinematically-themed integrated resort, will deliver a unique entertainment proposition to visitors to Macau, broadening the appeal of Macau in the region, particularly as it relates to the fast growing mass market segment.

"We expect to be able to achieve cost and revenue synergies between the Company's existing operating assets and Studio City, including the centralization of various support services."

"In addition to its array of entertainment attractions, Studio City's location directly adjacent to the Lotus Bridge immigration center makes it the first stop for visitors arriving via Hengqin Island, while its position next to one of three proposed casino light rail stations on Cotai will further enhance traffic flow, resulting in, among other things, high expected visitation.

"We also welcome the support from the Macau SAR Government as we embark on the development of another 'must see,' unique integrated resort that will deliver a significant number of non-gaming attractions and amenities that will help diversify the Macau economy."

Budget and Funding of Studio City

The current estimated design and construction budget for Studio City has been revised to US$2.04 billion, which, among other revisions, reflects a refined design incorporating enhanced entertainment offerings and increased tender prices. These budgets are preliminary and are subject to change.

The total development budget for Studio City is approximately US$2.9 billion, which includes the revised design and construction budget of US$2.04 billion together with pre-funded interest and other customary items, such as pre-opening expenses, working capital and land premium payments. The development and construction of Studio City is intended to be funded by the US$1.4 billion equivalent senior secured credit facilities referred to above, other debt financing and cash equity from the shareholders of SCI.

Under the senior secured credit facilities, equity contributions of US$825 million are required from SCI's shareholders prior to the funding date. Additionally, a completion guarantee or equivalent support (with a liability cap of US$225 million) supported by letters of credit or cash collateral is to be procured by the project development company of Studio City, namely, SCI.

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