SUBSEQUENT EVENTS:

Refinancing Transactions

New Senior Secured Credit Facilities

On October 14, 2016, the Authority entered into a credit agreement among the Authority, the Tribe, Citizens Bank, N.A., as Administrative and Collateral Agent, and the other lenders and financial institutions party thereto, providing for $1.4 billion in aggregate principal amount of senior secured credit facilities (the “New Senior Secured Credit Facilities”), comprised of a $170.0 million senior secured revolving credit facility (the “New Revolving Facility”), a $445.0 million senior secured term loan A facility (the “New Term Loan A Facility”) and a $785.0 million senior secured term loan B facility (the “New Term Loan B Facility). The New Senior Secured Credit Facilities mature on October 13, 2021 (in the case of the New Revolving Facility and the New Term Loan A Facility) and October 13, 2023 (in the case of the New Term Loan B Facility).

The New Term Loan A Facility amortizes in equal quarterly installments in an aggregate annual amount equal to 15.0% of the initial aggregate principal amount of the New Term Loan A Facility for the first two years after the closing date, 10.0% of the initial aggregate principal amount of the New Term Loan A Facility for the third year after the closing date and 7.5% of the initial aggregate principal amount of the New Term Loan A Facility in each year thereafter, with the balance payable on the maturity date of the New Term Loan A Facility. The New Term Loan B Facility amortizes in equal quarterly installments in an aggregate annual amount equal to 1.0% of the initial aggregate principal amount of the New Term Loan B Facility. Amortization of the New Term Loan A Facility and New Term Loan B Facility will begin with the first full fiscal quarter after the closing date.

The proceeds from the New Term Loan A Facility and New Term Loan B Facility, together with a drawing under the New Revolving Facility and proceeds from the 2016 Senior Unsecured Notes (as defined below), were used to: (i) repurchase the Authority’s 2013 Senior Unsecured Notes and 2012 Senior Subordinated Notes tendered pursuant to the Authority’s tender offers dated September 19, 2016 (the “Tender Offers”) and to redeem, satisfy and discharge the obligations in respect of notes not tendered (as described below), (ii) to satisfy in full all amounts outstanding under the Authority’s existing Senior Secured Credit Facilities, (iii) to prepay all amounts outstanding under the Authority's 2015 Senior Unsecured Notes and (iv) to satisfy certain other obligations (as outlined below) and to pay related fees and expenses. The New Revolving Facility will otherwise be available for general corporate purposes.

Borrowings under the New Senior Secured Credit Facilities will accrue interest as follows: (i) for base rate loans under the New Revolving Facility and New Term Loan A Facility, at a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 basis points and (c) the one-month LIBOR rate plus 100 basis points (the highest of (a), (b) and (c), the “base rate”), plus a total leverage-based margin of 150 to 325 basis points; (ii) for Eurodollar rate loans under the New Revolving Facility and New Term Loan A Facility, at the applicable LIBOR rate (subject to a 0.0% LIBOR floor) plus a total leverage-based margin of 250 to 425 basis points; (iii) for base rate loans under the New Term Loan B Facility, at the base rate plus 350 basis points; and (iv) for Eurodollar rate loans under the New Term Loan B Facility, at the applicable LIBOR rate (subject to a 1.0% LIBOR floor) plus 450 basis points. The Authority is also required to pay a total leverage-based undrawn commitment fee of between 37.5 and 50 basis points under the New Revolving Facility. Interest on base rate loans is payable quarterly in arrears. Interest on Eurodollar rate loans is payable at the end of each applicable interest period in arrears, but not less frequently than quarterly.

The Authority's obligations under the New Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, by the Pocono Subsidiaries, MBC, Mohegan Golf and Mohegan Ventures-NW (collectively, the “New Guarantors”; and the New Guarantors other than MBC, collectively, the “New Grantors”). The collateral securing the New Senior Secured Credit Facilities constitutes substantially all of the Authority’s and the New Grantors’ property and assets. In the future, certain other subsidiaries of the Authority may be required to become New Guarantors and/or New Grantors in accordance with the terms of the New Senior Secured Credit Facilities.

The New Senior Secured Credit Facilities contain customary covenants applicable to the Authority and its restricted subsidiaries, including covenants governing: incurrence of indebtedness, incurrence of liens, payment of dividends and other distributions, investments, asset sales, affiliate transactions and mergers or consolidations. The New Senior Secured Credit Facilities also include financial maintenance covenants pertaining to total leverage, secured leverage and fixed charge coverage. The New Senior Secured Credit Facilities also contain customary events of default relating to, among other things, failure to make required payments, breach of covenants and breach of representations.

New Line of Credit

On October 14, 2016, the Authority entered into a $25.0 million revolving credit facility with Bank of America, N.A. (the “New Line of Credit”). The New Line of Credit is coterminous with the New Senior Secured Credit Facilities. Pursuant to provisions of the New Senior Secured Credit Facilities, under certain circumstances, the New Line of Credit may be converted into loans under the New Senior Secured Credit Facilities. Under the New Line of Credit, each advance accrues interest on the basis of a one-month LIBOR rate plus an applicable margin based on the Authority's total leverage ratio, as each term is defined under the New Line of Credit. Borrowings under the New Line of Credit are uncollateralized general obligations of the Authority. The New Line of Credit contains negative covenants and financial maintenance covenants that are substantially the same as those contained in the New Senior Secured Credit Facilities.

New Senior Unsecured Notes

On October 14, 2016, the Authority closed a private placement under Rule 144A and Regulation S of the Securities Act of 1933 of $500.0 million in aggregate principal amount of new senior unsecured notes (the “2016 Senior Unsecured Notes”). Upon closing of the private placement, the Authority, the New Guarantors and the Tribe entered into an indenture agreement (the “2016 Senior Unsecured Notes Indenture”) with U.S. Bank, National Association, the trustee for the 2016 Senior Unsecured Notes.

The 2016 Senior Unsecured Notes bear fixed interest payable at a rate of 7.875% per annum and mature on October 15, 2024. Interest on the 2016 Senior Unsecured Notes is payable semi-annually in arrears on April 15 and October 15, with the first interest payment scheduled for April 15, 2017. The 2016 Senior Unsecured Notes are unsecured, unsubordinated obligations of the Authority. The 2016 Senior Unsecured Notes are guaranteed by the New Guarantors and will be guaranteed by any restricted subsidiary of the Authority that becomes a guarantor in accordance with the terms of the 2016 Senior Unsecured Notes Indenture.

At any time prior to October 15, 2019, the Authority may redeem the 2016 Senior Unsecured Notes, in whole or in part, at a price equal to 100% of the principal amount of the 2016 Senior Unsecured Notes redeemed plus accrued and unpaid interest, if any, to the date of redemption and a make-whole premium. The 2016 Senior Unsecured Notes are redeemable at the Authority’s option, in whole or in part, at any time on or after October 15, 2019, at specified redemption prices, together with accrued and unpaid interest, if any, to the date of redemption. If the Authority experiences specific kinds of change-of-control triggering events, it is required to make an offer to repurchase the 2016 Senior Unsecured Notes at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any. Additionally, if the Authority undertakes specific kinds of asset sales and does not use the related sale proceeds for specified purposes, the Authority may be required to offer to repurchase the 2016 Senior Unsecured Notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any. In certain circumstances, if any gaming regulatory authority requires a holder or beneficial owner of the 2016 Senior Unsecured Notes to be licensed, qualified or found suitable under applicable gaming laws, and such holder or beneficial owner does not obtain such license, qualification or finding of suitability within a specified time, the Authority can require such holder or beneficial owner to dispose of its 2016 Senior Unsecured Notes or call for redemption of the 2016 Senior Unsecured Notes held by such holder or beneficial owner at a purchase price equal to accrued and unpaid interest, if any, plus the lesser of 100% of the principal amount thereof or the price paid for such notes by such holder or beneficial owner.

The 2016 Senior Unsecured Notes Indenture contains certain covenants that, subject to certain significant exceptions, limit, among other things, the Authority’s and New Guarantors’ ability to incur additional debt, pay dividends or distributions, make certain investments, create liens on assets, enter into transactions with affiliates, merge or consolidate with another company or transfer and sell assets. The 2016 Senior Unsecured Notes Indenture also includes customary events of default, including, but not limited to, failure to make required payments, failure to comply with certain agreements or covenants, failure to pay certain other indebtedness the occurrence of which is caused by a failure to pay principal, premium or interest or results in the acceleration of such indebtedness, certain events of bankruptcy and insolvency and certain judgment defaults.

The 2016 Senior Unsecured Notes and guarantees have not been and will not be registered under the Securities Act of 1933 or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.

Satisfaction and Discharge of the 2013 Senior Unsecured Notes and the 2012 Senior Subordinated Notes

On October 14, 2016, the Authority called for redemption all of its outstanding 2013 Senior Unsecured Notes and 2012 Senior Subordinated Notes, in each case that were not validly tendered by the tender deadline for the transaction and accepted for payment. The outstanding 2013 Senior Unsecured Notes and 2012 Senior Subordinated Notes were redeemed on November 14, 2016. Also on October 14, 2016, the Authority satisfied and discharged the 2013 Senior Unsecured Notes indenture and 2012 Senior Subordinated Notes indenture by depositing with the trustee sufficient funds to fund the redemption of the 2013 Senior Unsecured Notes and the 2012 Senior Subordinated Notes on November 14, 2016 and to pay accrued interest on the redeemed notes to the redemption date.

Satisfaction of Other Obligations

In connection with the refinancing transaction outlined above, on October 14, 2016, the Authority satisfied the following outstanding obligations:


•	repayment in full and termination of the New Downs Lodging Credit Facility;


•	repayment of the remaining outstanding amount of the 2012 Mohegan Tribe Minor’s Trust Promissory Note;


•	repayment of the remaining outstanding amount of the 2013 Mohegan Tribe Promissory Note; and


•	payment in full and termination of that certain land lease agreement between the Authority and the Tribe, which property underlying such land lease agreement was added to the Amended and Restated Land Lease Agreement (discussed below).

Transaction Costs

The Authority incurred approximately $88.3 million in costs in connection with these refinancing transactions. In addition, at the date of these refinancing transactions, the Authority had approximately $23.8 million in previously deferred debt issuance costs, premiums and discounts related to the various debt that were refinanced. While the Authority has not yet completed its evaluation, it expects that a portion of the costs incurred in connection with these refinancing transactions, as well as previously deferred debt issuance costs, premiums and debt discounts, will be expensed in the first quarter of 2017.

Amended and Restated Land Lease Agreement

On October 14, 2016, the Authority entered into an amended and restated land lease agreement (the “Amended and Restated Land Lease Agreement”), by and between the Tribe, as lessor, and the Authority, as lessee, amending and restating the original land lease agreement pursuant to which the Authority leases the land upon which Mohegan Sun is located and improvements and related facilities constructed or installed on the property. The Amended and Restated Land Lease Agreement amended the original land lease agreement to, among other things: (1) update the legal description of the property and (2) extend the term to 25 years from the date of the Amended and Restated Land Lease Agreement with an option, exercisable by the Authority, to extend the term for one additional 25-year period. Other than the foregoing, the terms and conditions of the Amended and Restated Land Lease Agreement are substantially the same as the original land lease agreement.

Mergers and Dissolutions

On October 14, 2016, the Authority merged out of existence or dissolved the following entities: MVW, WTG, MTGA Gaming, MG&H, Mohegan Resorts, Mohegan Resorts Mass and Downs Lodging.