US Federal Reserve agrees two-year loan in return for 80% equity stake
US authorities have stepped in to rescue insurance giant American International Group (AIG) with an $85bn (£48bn) funding package.
The deal will see the Federal Reserve lend the embattled company up to $85bn for two years in exchange for a 79.9% equity stake.
AIG provides performance bonds and insurance services to a range of industries including construction.
The news comes after the American government refused to throw investment bank Lehman Brothers a lifeline, forcing it into administration.
The move has brought some calm to global markets, which have been heavily bruised by the week's events.
The FTSE 100 rose in London this morning following two days of sharp falls.
AIG provides performance bonds and insurance services to a range of industries including construction.
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