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" ... Bonds may also feature other options that affect the price an investor is willing to pay. For instance, if the bond is callable (meaning the issuer retains the right to repay it early if interest rates decline), the potential capital gains are reduced, which in turn lowers the price investors are willing to pay. ... "
" ... Buy Directv Holdings 4.60% due February 15, 2021 (CUSIP: 25459HAW5) callable November 15, 2020 at par at a price around 101 for a 4.46% yield to worst call and yield to maturity. This BBB rated, $1 billion issue should be easy to buy. ... "
" ... I’d rate preferred stocks as single B credits because the underlying properties are leveraged banks and insurance properties. For me, it’s better to own single B corporates yielding near 6% that aren’t callable for 7 to 10 years. In a low interest-rate setting they can rally 10% above par. Because I can do the security analysis on such companies, I feel comfortable. But, if you see recession around the corner, this paper can slide 10% practically overnight. The capacity for the bond market to panic - in both directions is a seldom-mentioned phenomenon. ... "
" ... Shortly after the Civil War, which saw the enactment of federal fiat money (the “greenback” of that era, issued to finance the war), there was a federal law passed that required rural and agricultural banks to keep 25% of their deposits with certain certified national banks, which were based mainly in New York. The national banks were required to pay interest on those deposits, so they had to put the money out for loans. But because those deposits were “callable” at any time, there was a limit to the types of loans they could do, as long-term loans mismatched assets and liabilities. ... "
" ... This puts prospective yield near 6 percent. Today, you only find this payout on preferred stocks, which carry no upside. Over par sooner or later they are called away. Long duration BB debentures yield close to 6 percent, but many are callable, thereby limiting appreciation. ... "