The RTC will sell down AIG assets such as International Lease Finance, the insurance company "Manufacturers' Life", etc. until the $85BBN loan is repaid, leaving whatever is left for the current shareholders.
You can bet the government will sell the good stuff and the shareholders will get the junk. This is not a nationalization.
BTW, the RTC actually made a $100 million profit on the $720 billion of S&L assets it took over in the 90's.
This is essentially a bankruptcy, except the Federal Reserve controls the proceedings and liquidation instead of a BK judge. The big questions that remain are:
Where do the bondholders stand? Are they before or after the Fed in getting paid back?
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As AIG’s portfolio is liquidated, isn’t this going to finally put prices on many illiquid derivatives that are being marked-to-model on everyone’s books? If the market price turns out to be significantly lower than modeled prices, except to see a succeeding round of write downs and failures.