NakedPuts00

I think you mean RISING interest environment, not steepening.

If so, you know that bond values drop when rates go up.

callable outperforms because the decline in value of your short call option offsets the decline in value of the bond.

for putable its because you have the option to sell the bond back to the borrower at par, so even if the bond value goes below par, you can sell for the par amount, and reinvest at the higher rates.