American International Group Inc is close to a deal with the U.S. government that would ease the terms of its bailout, give a further equity commitment and help it pay down debt, a person familiar with the matter said on Saturday.

The revised agreement is expected to include an additional $30 billion equity commitment from the government, more lenient terms on an existing preferred investment, and a lower interest rate on an existing $60 billion government credit line, the source said.

AIG will also give the Federal Reserve ownership interests in its Asia-based American Life Insurance (Alico) and American International Assurance Co (AIA) units, the source said.

AIG, once the world's largest insurer, is also expected to post a roughly $60 billion quarterly loss, hurt in large part by writedowns on certain tax assets and commercial mortgage backed securities, the source said.

AIG declined to comment.

(Reporting by Paritosh Bansal; Editing by Eric Walsh)