The continued use of certain features of shifting-interest structures in MBS will keep risk of loss high for senior bond holders and even erode senior credit enhancement, although senior bonds in relatively new shifting-interest deals appear better protected from late-stage defaults, according to an analysis by Moody’s Investors Service. Moody’s said senior bonds in shifting-interest transactions it rated since 2010 have better armor against defaults in the late stages of the loan because they all have a hard credit enhancement floor. In a shifting-interest structure, the securitization sponsor may cover...