From my understanding, I know that we can decompose a long callable bond into a long vanilla bond and short receiver swaption. However, I do not understand, how could I separate or calculate the swaption part?
From what I have learnt, swaption is a option on a fixed-float swap. But a FRN is paying a index rate with a spread, such that the rate is always variable. Then what could i set for the strike rate for the swaption?