OffshoreInvest, incorporated in Country X, is owned in equal shares by a consortium of five U.S. companies. Country X levies a 3% value added tax, but no income tax. The only asset held by OffshoreInvest is $100 million in cash. It is considering investing all the cash in one of the following assets:

• A U.S. bond bearing interest at an annual rate of 6%
• A Country X bond bearing interest at an annual rate of 6%
• A Country X building generating rents at an annual rate of 6%

OffshoreInvest plans to distribute $500,000 of its investment income to all its U.S. shareholders on an annual basis. In terms of current U.S. tax savings, which investment would you recommend, and why? Assume a 21% U.S. tax rate.