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"A bond selling at a premium over par can be called out from under you at a loss. Hence people tend to avoid them."

My point was that even those with a "make whole call provision". From what I understand you are protected from an early call with this.

http://financial-dictionary.thefreedictionary.com/make-whole...

make-whole call provision
A stipulation in a bond indenture that permits the borrower to redeem a bond prior to maturity by making a lump-sum payment equal to the present value of future interest payments that will not be paid because of the early call. The provision makes the bondholder whole by providing compensation for interest payments that are missed because of an early redemption.

I believe the the present value is calculated using a rate based upon the comparable term of a treasury note plus maybe a 1/4 or 1/2%. This would make it too expensive for the issuer to call early.

So what I sm saying is that the market is not pricing in this protection and you are able to earn a higher yield because of a psychological rather than real risk of loss due to call.
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