No. of Recommendations: 1
Here's one that I think will get a lot of attention.

Fannie Mae
Coupon: 6.00%
Rating: AAA S&P
Maturity: 05-16-25
Callable 11-16-05 @ 100
Price: 100
Yield to Maturity: 6.00%
First Settle Date: 05-16-05

Doesn't "callable" mean that if interest rates for this sector of bonds goes up, you either are stuck at a 6% coupon or you sell at a loss? On the other hand, if interest rates go down, Fannie Mae may decide to call those nice 6% bonds and issue bonds with a lower coupon rate, so you have the principal but you don't have as good a place at that time where you can put the money.

Six months seems a pretty short period before the bond is callable. The 6% is probably higher to compensate the investor for the "call risk". As stated in The Moon Is a Harsh Mistress", TANSTAAFL (There Ain't No Such Thing As A Free Lunch).
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