Can someone please explain why holding a fixed-rate callable bond can be viewed as being long on a straight fixed-rate bond and being short on a receiver swaption?
On the callable bond you’re receiving a fixed rate, but if rates drop the bond can be called and you’ll have to reinvest the proceeds at a lower (as yet unknown) interest rate.
If you own a straight fixed rate bond and are short a receiver swaption then if rates drop the owner of the swaption will exercise it and you’ll pay a fixed rate and receive a (lower, and, as yet unknown) floating rate; your net is receiving a lower (as yet unknown) interest rate.