Coleman Church

I mean, there are countries that don't necessarily need to borrow as much as they do, but they still do.

Why?

Because, one, because they can cheaply.

I would argue the GCC countries don't necessarily need to borrow as much as they have.

The Gulf, Persian Gulf countries.

But they have recently, Saudi, for example, because they're going on a massive expansion.

to diversify themselves away from their core business, which is oil, which is actually a very wise thing to do because if you look at countries historically, Venezuela is probably the most extreme example,

There was a single A-rated country in the 80s.

I went there in the 90s.

I mean, gleaming infrastructure, like incredible highways, beautiful hotels, amazing, amazing place.

And they never took the oil wealth and diversified away from it in a meaningful way.

And then when you have an oil shock and you've taken out too much debt against the...

let's make up a number, $100 oil price, and oil drops to 30, you're all upside down.

And so that's what MBS is looking at for a multi-decade plan to build these cities, technology, innovation centers, and so forth, which is clearly learning from the past.

But they're borrowing to do that.

They're borrowing to do that, yeah.

But they're borrowing at fairly cheap rates.

There's also a concept that you want to borrow at the sovereign level to set a benchmark against which your companies can borrow in international markets.

This would be the broader the investor base, theoretically the cheaper the interest rate.

So they'll set a benchmark level and then a corporation can borrow at that rate plus 20 basis points or 50 basis points.