AIG and U.S. in Advanced Repayment Talks: Source (AIG)

American International Group Inc. AIG and the Treasury Department are in advanced discussions over repayment terms, a source familiar with the matter told Reuters. The Reuters report notes that "A possible conversion of the Treasury's $49 billion preferred stake in AIG into common stock is one of the options being discussed, the source said, who declined to be named because the talks are not public." AIG received more than $180 billion from U.S. taxpayers when it was bailed out in 2008. The plan for the Treasury to exit AIG ownership could be established as early as the first half of 2011, the Wall Street Journal reported. "Our objectives remain the same: to repay taxpayers and position AIG over time as a strong, independent company worthy of investor confidence," an AIG spokeswoman said. The Reuters report notes that "The company expects a big part of that money to come in by the end of the year, as it closes on the sale of American Life Insurance Co to MetLife Inc (MET.N) for $15.5 billion and lists American International Assurance (AIA) in Hong Kong." Shares of AIG are down 1.7% this afternoon, to $36.30. Click here to get today's best trading ideas.