Magna Entertainment Corp. Announces Amendments and Extensions of Financing Arrangements

Magna Entertainment Corp. Announces Amendments and Extensions of Financing
Arrangements

AURORA, ON, May 23 /PRNewswire-FirstCall/ - Magna Entertainment Corp.
("MEC" or the "Company") (NASDAQ: MECA; TSX: MEC.A) today announced that it
has amended certain of its financing agreements including:
- extending the maturity date of its $40 million senior secured
revolving credit facility (the "Senior Bank Facility") with a
Canadian chartered bank from May 23, 2008 to July 30, 2008 (subject
to certain acceleration provisions);

- extending the maturity date of its bridge loan facility (the "Bridge
Loan") with a subsidiary (the "MID Lender") of MI Developments Inc.
("MID"), MEC's controlling shareholder, from May 31, 2008 to
August 31, 2008 (subject to certain acceleration provisions) and
increasing the maximum commitment available from $80 million to
$110 million; and

- extending the due date of its $100 million repayment requirement
under the Gulfstream Park project financing with the MID Lender from
May 31, 2008 to August 31, 2008 (subject to certain acceleration
provisions).

On September 12, 2007, MEC's Board of Directors approved a debt
elimination plan designed to eliminate MEC's net debt by December 31, 2008 by
generating funding from asset sales, entering into strategic transactions
involving certain of MEC's racing, gaming and technology operations, and a
possible future equity issuance. Although MEC continues to implement its debt
elimination plan, the sale of assets contemplated under the debt elimination
plan is taking longer than originally contemplated and the success of the debt
elimination plan is not assured.
On March 31, 2008, MID announced that it had received a reorganization
proposal on behalf of various shareholders of MID, including entities
affiliated with the Stronach Trust, MID's controlling shareholder (the "MID
Reorganization Proposal"). The MID Reorganization Proposal contemplates, among
other things, MID calling by May 30, 2008 a special meeting of shareholders to
consider the proposal and closing the transaction no later than July 30, 2008.
The MID Reorganization Proposal is subject to certain material conditions,
some of which are beyond MID's control, and there can be no assurance that the
transaction contemplated by the MID Reorganization Proposal, or any other
transaction, will be completed.
Senior Bank Facility Amendments
-------------------------------
The maturity date of the Senior Bank Facility has been extended from May
23, 2008 to July 31, 2008; provided, however, that if the MID Reorganization
Proposal does not proceed for any reason, the maturity date will be
accelerated to a date that will be fourteen days prior to the accelerated
maturity dates of the facilities with the MID Lender. In connection with the
amendment and extension of the Senior Bank Facility, MEC incurred a fee of
$0.67 million.
Bridge Loan Amendments
----------------------
The maximum commitment available under the Bridge Loan has been increased
from $80 million to $110 million and MEC is now permitted to redraw amounts
that it repaid prior to May 23, 2008 (approximately $21.5 million). The
maturity date of the Bridge Loan has been extended from May 31, 2008 to August
31, 2008; provided, however, that if the MID Reorganization Proposal does not
proceed for any reason, the maturity date will be accelerated to one month
after the date on which MID gives notice to MEC that the MID Reorganization
Proposal is not proceeding.
In connection with the amendment and extension of the Bridge Loan, MEC
incurred a fee of $1.1 million (1.0% of the increased maximum commitment). If
the MID Reorganization Proposal has not been approved by August 1, 2008 or if
the Bridge Loan maturity date is accelerated, there will be an additional
arrangement fee of 1.0% of the then current commitment.
Project Financing Amendments
----------------------------
In connection with the amendments to the Bridge Loan. MEC and the MID
Lender also amended the project financing facilities provided to Gulfstream
Park and Remington Park. These amendments included extending the deadline for
repayment of at least $100 million under the Gulfstream Park project financing
facility from May 31, 2008 to August 31, 2008 (during which time any
repayments made under either facility will not be subject to a make-whole
payment). If the Bridge Loan maturity date is accelerated, the deadline for
repayment of the $100 million will also be accelerated to the same date.
Special Committee Process
-------------------------
Consideration of the amendments to the financing arrangements with the MID
Lender was supervised by the Special Committee of MEC's board of directors
consisting of Jerry D. Campbell (Chairman), Anthony J. Campbell and William J.
Menear. The approval of MEC's board followed a favorable recommendation of the
Special Committee. The Special Committee retained independent legal advisors
to assist it in its deliberations in respect of these transactions.
MEC will file a material change report as soon as practicable after
issuing this press release. The material change report will be filed less than
21 days prior to the closing of the loan amendments. The timing of the
material change report is, in MEC's view, both necessary and reasonable
because the terms of the amendments were settled and approved by MEC's board
of directors on May 22, 2008 and MEC requires immediate funding to address its
short-term liquidity needs.
MEC, North America's largest owner and operator of horse racetracks, based
on revenue, acquires, develops, owns and operates horse racetracks and related
pari-mutuel wagering operations, including off-track betting facilities. MEC
also develops, owns and operates casinos in conjunction with its racetracks
where permitted by law. MEC owns and operates AmTote International, Inc., a
provider of totalisator services to the pari-mutuel industry, XpressBet(R), a
national Internet and telephone account wagering system, as well as
MagnaBet(TM) internationally. Pursuant to joint ventures, MEC has a fifty
percent interest in HorseRacing TV(R), a 24-hour horse racing television
network, and TrackNet Media Group LLC, a content management company formed for
distribution of the full breadth of MEC's horse racing content.
This press release contains "forward-looking statements" within the
meaning of applicable securities legislation, including Section 27A of the
United States Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act") and forward-looking information as defined in the
Securities Act (Ontario) (collectively referred to as forward-looking
statements). These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 and
the Securities Act (Ontario) and include, among others, statements regarding
the anticipated maturity date of our Senior Bank Facility and Bridge Loan and
other matters that are not historical facts.
Forward-looking statements should not be read as guarantees of future
performance or results, and will not necessarily be accurate indications of
whether or the times at or by which such performance or results will be
achieved. Undue reliance should not be placed on such statements.
Forward-looking statements are based on information available at the time
and/or management's good faith assumptions and analyses made in light of our
perception of historical trends, current conditions and expected future
developments, as well as other factors we believe are appropriate in the
circumstances and are subject to known and unknown risks, uncertainties and
other unpredictable factors, many of which are beyond our control, that could
cause actual events or results to differ materially from such forward-looking
statements. Important factors that could cause actual results to differ
materially from our forward-looking statements include, but may not be limited
to, material adverse changes in: general economic conditions; the popularity
of racing and other gaming activities as recreational activities; the
regulatory environment affecting the horse racing and gaming industries; our
ability to obtain or maintain government and other regulatory approvals
necessary or desirable to proceed with proposed real estate developments;
increased regulation affecting certain of our non-racetrack operations, such
as broadcasting ventures; and our ability to develop, execute or finance our
strategies and plans within expected timelines or budgets. In drawing
conclusions set out in our forward-looking statements above, we have assumed,
among other things, that we will be able to successfully implement our debt
elimination plan and comply with the terms of and/or obtain waivers or other
concessions from our lenders and refinance or repay on maturity our existing
financing arrangements (including the Senior Bank Facility and our Bridge
Loan), and there will not be any material adverse changes in: general economic
conditions; the popularity of horse racing and other gaming activities;
weather and other environmental conditions at our facilities; the regulatory
environment; and our ability to develop, execute or finance our strategies and
plans as anticipated.
Forward-looking statements speak only as of the date the statements were
made. We assume no obligation to update forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
forward-looking statements. If we update one or more forward-looking
statements, no inference should be drawn that we will make additional updates
with respect thereto or with respect to other forward-looking statements.
SOURCE Magna Entertainment Corp.

Blake Tohana, Executive Vice-President and Chief Financial Officer, Magna
Entertainment Corp., 337 Magna Drive, Aurora, ON, L4G 7K1, Tel: (905)
726-7493