AIG board nears approval of revised Fed plan: report

[seemslikeadream]

http://www.reuters.com/article/newsOne/idUSTRE4A905420081110

NEW YORK (Reuters) - The board of troubled insurer American International Group Inc was Sunday night nearing approval of a revised federal bailout to replace a previous $85 billion rescue, according to The Wall Street Journal, citing people familiar with the matter.

AIG spokesmen did not immediately return calls seeking comment.

Under the new plan, the government is expected to cancel most of AIG's credit default swap agreements through a massive purchase of underlying real estate assets, the Journal said.

Those agreements have led AIG, once the world's biggest insurer by market value, to record $18 billion in losses over the past three quarters.

The two sides are also expected to agree to a lower interest rate on the loan, to 3 percent over three-month LIBOR from 8.5 percent over the benchmark interest rate.

In place of the $85 billion two-year loan agreed on September 16, AIG would have a $60 billion