AIG near deal on new terms of U.S. bailout: source

The logo of American International Group (AIG) is seen at their offices in New York in this September 18, 2008 file photo. REUTERS/Eric Thayer

NEW YORK (Reuters) - American International Group Inc is close to a deal with the U.S. government that would ease the terms of its bailout, give a further equity commitment and help it pay down debt, a person familiar with the matter said on Saturday.

The board of the troubled insurer is due to meet on Sunday to vote on the deal, which could be announced when AIG reports its quarterly results on Monday.

The revised agreement is expected to include an additional $30 billion equity commitment from the government, more lenient terms on an existing preferred investment, and a lower interest rate on an existing $60 billion government credit line, the source said.

AIG will also give the Federal Reserve ownership interests in its Asia-based American Life Insurance (Alico) and American International Assurance Co (AIA) units, the source said.

AIG, once the world’s largest insurer, is also expected to post a roughly $60 billion quarterly loss, hurt in large part by writedowns on certain tax assets and commercial mortgage backed securities, the source said.

AIG declined to comment.

Reporting by Paritosh Bansal; Editing by Eric Walsh