The interest is tax-deductible in the US, which further reduces their US tax liability. Also, as ryonwaggoner points out, they are free to buy e.g. Treasuries

The interest is tax-deductible in the US, which further reduces their US tax liability. Also, as ryonwaggoner points out, they are free to buy e.g. Treasuries with the offshore cash so that the effective interest rate closer to 1% (before the effect of the reduction in tax liability).