Magna Entertainment Corp. Announces Amendments and Extensions of Financing Arrangements

    AURORA, ON, Oct. 15 /CNW/ - Magna Entertainment Corp. ("MEC" or the
"Company") (NASDAQ:   MECA; TSX: MEC.A) today announced changes to certain of
its financing arrangements including:

    -   extending the maturity date of its $40 million senior secured
        revolving credit facility (the "Senior Bank Facility") with a
        Canadian chartered bank from October 15, 2008 to November 17, 2008;

    -   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 October 31, 2008 to
        December 1, 2008 and increasing the maximum commitment available
        from $110 million to $125 million. MEC is also now permitted to
        redraw amounts that it repaid in July 2008 (approximately
        $4.5 million) such that the amount available to MEC under the Bridge
        Loan will be increased by approximately $19.5 million.

    Also, further draws under the Bridge Loan will not be permitted after
November 17, 2008 unless the Senior Bank Facility is further extended or

    MEC has received a notice from the MID Lender advising that a required
repayment of $100.0 million under the Gulfstream Park project financing with
the MID Lender has also been extended to December 1, 2008, during which time
any repayments made under the Gulfstream Park facility or Remington Park
facility will not be subject to a make-whole payment.

    MEC incurred a fee of $0.4 million in connection with the extension of
the Senior Bank Facility, a fee of $1.25 million in connection with the
extension of the Bridge Loan and an extension fee of $1.0 million under the
Gulfstream Park facility.

    As we have previously disclosed, although we continue to take steps to
implement our debt elimination plan, real estate and credit markets have
continued to demonstrate weakness to date in 2008 and we do not expect that we
will be able to complete asset sales at acceptable prices as quickly or for
amounts as originally contemplated. As a result, combined with our upcoming
debt maturities and our operational funding requirements, we will again need
to seek extensions or additional funds in the short-term from one or more
possible sources. The availability of such extensions or additional funds from
existing lenders, including our controlling shareholder, or from other sources
is not assured and, if available, the terms thereof are not determinable at
this time.

    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.

    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 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, 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 Report 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 the
Company's 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 the Company's
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 the Company's 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; the Company's 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 the
Company's non-racetrack operations, such as broadcasting ventures; and the
Company's ability to develop, execute or finance the Company's 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 continue with our efforts to implement the September 12, 2007
adopted plan to eliminate the Company's debt, although not on the originally
contemplated time schedule, and comply with the terms of and/or obtain waivers
or other concessions from the Company's lenders and refinance or repay on
maturity the Company's existing financing arrangements (including the Senior
Bank Facility and the 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 the
Company's facilities; the regulatory environment; and our ability to develop,
execute or finance the Company's 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.

For further information:

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

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