FACTBOX - U.S. Treasury and Fed restructure support for AIG

(Reuters) - The following are details of the restructured financial support the U.S. Federal Reserve and Treasury Department have offered to insurer American International Group:

* Treasury to purchase $40 billion (25.3 billion pounds) of newly issued AIG preferred shares under the Troubled Asset Relief Program, allowing Fed to reduce from $85 billion to $60 billion the amount available under its original loan to AIG.

* Interest rate on Fed loan reduced to three-month Libor plus 300 basis points from three-month Libor plus 850 basis points, and the fee on undrawn funds will be reduced to 75 basis points from 850 basis points. Credit extended to five years from two year.

* New York Fed to lend up to $22.5 billion to newly formed limited liability company to fund the purchase of residential mortgage-backed securities from AIG. AIG to make $1 billion subordinated loan to the LLC and bear the risk for the first $1 billion of any losses. New York Fed and AIG will share any residual cash flows after loans are repaid.

* Proceeds from RMBS facility and other AIG resources will be used to repay second Fed loan to AIG, which will be terminated.

* New York Fed to lend up to $30 billion to a second newly formed LLC to fund purchases of multi-sector collateralized debt obligations on which AIG wrote credit default swap contracts. AIG to make $5 billion subordinated loan to the LLC and bear the risk for the first $5 billion of any losses. The CDS counterparties will concurrently unwind the related CDS transactions. New York Fed and AIG will share any residual cash flows after the loans are repaid.