AIG Gets Revamped Bailout Package

Updated from 6:30 a.m. EST

American International Group (AIG Quote) confirmed Monday the U.S. government has given the insurer a new bailout package that includes the purchase of $40 billion of newly issued AIG perpetual preferred shares and warrants under the Troubled Asset Relief Program.

The purchase will allow the Federal Reserve to reduce to $60 billion from $85 billion the total amount available under the credit facility established by the Federal Reserve Bank of New York in mid-September, the Fed and the Treasury said in a statement Monday.

The Fed said the interest rate on the facility will be reduced and the length of the facility will be extended to five years from two years. ...