by Calculated Risk on 9/16/2008 08:18:00 PM

From the NY Times: Fed Readies A.I.G. Loan of $85 Billion for an 80% Stake

In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.
...
Without the help, A.I.G. was expected to be forced to file for bankruptcy protection.

WSJ article: U.S. Plans Rescue of AIG to Halt Crisis;
Central Banks Inject Cash as Credit Dries Up

The primary option being hammered out involved the Fed providing AIG with a short-term "bridge" loan of $85 billion ... In exchange, the government would receive warrants in AIG representing the right to buy its stock, under certain conditions. That could put the government in a position to potentially control a private insurer, a historic move, especially considering that AIG isn't directly regulated by the federal government.

From Bloomberg: AIG May Get $85 Billion U.S. Loan in Return for Majority Stake