The Federal Reserve is negotiating a $85-90 billion secured bridge loan for American International Group Inc., according to a report on CNBC.
Shareholders would be severely diluted by the bailout that involves the bridge loan. The government would receive AIG warrants for most of its equity in the bailout being negotiated. CNBC said the deal would give AIG incentive to sell its assets quickly to help pay off the bridge loan.
Edit: Its going to happen.