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American International Group and the U.S. government agreed on a revised rescue package for the giant insurer Sunday.

Here are the key terms of the deal, according to sources:

A $30 billion equity commitment from the U.S. government that ÌìÃÀÍøÕ¾´«Ã½´«Ã½ can draw on as needed.

American Life Insurance Co. (Alico), American International Assurance (AIA) to be put in trusts. U.S. Federal Reserve will have preferred stock in these trusts, with ÌìÃÀÍøÕ¾´«Ã½´«Ã½ receiving common stock. Talks to sell both units will continue, with IPOs to be considered an option when markets improve.

Up to 20 percent of ÌìÃÀÍøÕ¾´«Ã½´«Ã½’s property and casualty business may be sold to public, and the division will be given a new name and separate board. Over time the company could be sold off in its entirety.

ÌìÃÀÍøÕ¾´«Ã½´«Ã½ will securitize up to $10 billion in U.S. life insurance policies to help pay down debt to the Fed.

The dividend ÌìÃÀÍøÕ¾´«Ã½´«Ã½ pays the government on its $40 billion preferred stake will be made non-cumulative.

The interest rate on an existing $60 billion government credit line will be cut to match the three-month Libor rate, which will save about $1 billion a year. Credit facility to be about $20 billion after ÌìÃÀÍøÕ¾´«Ã½´«Ã½ pays down roughly $38 billion already drawn.

Part of the government’s new $30 billion equity commitment may be used to help would-be buyers of aircraft lessor International Lease Finance Corp, which has debt coming due in 2009.

(Reporting by Paritosh Bansal and Lilla Zuill; Editing by Ted Kerr)

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