Washington restructures loan to save battered AIG

The Treasury is to take a $40 billion stake in American International Group (AIG), once the biggest insurance company in the world, as part of a restructuring of the firm's $122.8 billion Federal Reserve loan.

The loan will raise the amount available to AIG to $150 billion.

AIG had an $85 billion credit line with the New York Fed. The Fed also authorised the company to swap up to $37.8 billion-worth of investment-grade fixed-income securities for New York Fed funds.

Under the revised terms, the

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