Fed to provide $85 billion bridge loan to AIG: source

(Reuters) - The Federal Reserve will provide a roughly $85 billion bridge loan to AIG <AIG.N> and take a nearly 80 percent stake in the company, according to a source briefed on the matter.

CNBC earlier reported the bridge loan would be secured and that shareholders would be severely diluted by the bailout.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and others were involved in the talks, CNBC said, adding that the bailout plan being negotiated "isn't a conservatorship."

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