American International Group (AIG) - Get Report is in discussions with the government about Washington backstopping some of its troubled assets and is considering selling units through initial public offerings, the Wall Street Journal reports.

"We're looking at a broader array of recapitalization options," said Paula Reynolds, an AIG vice chairman who is overseeing the restructuring of AIG. The insurer received a bailout package from the U.S. government in September to help it stave off bankruptcy. The bailout package now totals $150 billion.

Backstopping of assets would be similar to government guarantees on troubled assets owned by

Citigroup

(C) - Get Report

and

Bank of America

(BAC) - Get Report

, the

Journal

reports.

The discussions reflect a shift in how AIG and the government, which got an 80% stake in AIG from the bailout, approach the situation facing the company, which is trying to repay a government loan of as much as $60 billion that is part of the bailout, according to the

Journal

. So far, AIG has borrowed $38.3 billion.

The discussions also reflect the reality that the financial crisis has made AIG's initial strategy of selling off assets to repay the loan increasingly difficult. Finding buyers has been difficult. AIG has announced sales of only a few smaller businesses that, at least based on deals where a sale price was announced, will earn it a little more than $1 billion, the

Journal

reports.

This article was written by a staff member of TheStreet.com.