The first patented AI/ML credit framework built by structured finance practitioners, not data scientists. Finance is as much art as it is science.
A Multidimensional Risk-State Analysis of Chicago’s Unlimited-Tax General Obligation Credit and the Challenge of Cross-Asset Credit Comparison
A Multidimensional Risk-State Analysis of the City of New York General Obligation Credit (Unlimited Tax General Obligation – UTGO)
Re-Evaluating Higher Education Credit: A Structural Risk-State Analysis of New
York University
Current rating dynamics have a profound impact on the world’s ability to meet today’s historic environmental and social needs.
“A siloed approach can’t get you there.” — Rob Fauber, CEO, Moody’s | Fortune, April 16, 2026
Rating agencies represent that their ratings are comparable across all asset classes worldwide yet the rating metrics they deploy are often fragmented within asset classes and disconnected, often incoherent, across asset classes.
What is considered a credit strength for one public finance issuer is ignored as a credit consideration for another public finance issuer. (See our discussion of the emerging market sovereign debt crisis below).
The tax base of most large and developed municipalities is more varied than even the most diversified corporate bond pools that serve as collateral for highly rated securitized transactions.
Furthermore, corporations pay their bondholders only after they pay the costs of doing business in the jurisdictions within which they operate yet these superior credit positions are not directly factored into the rating of municipal credits to the disadvantage of the majority of municipal issuers.
| Upgraded Rating | |
|---|---|
| City of Chicago’s General Obligation | Baa3 |
| ICG US Collateralized Loan Obligation (“CLO”) 2014-2, LTD Cass C-RR Deferrable Mezzanine Term Notes | A1 |
Raised the City of Chicago’s General Obligation rating to Baa3, their lowest investment grade rating.
Upgraded the ICG US Collateralized Loan Obligation (“CLO”) 2014-2, LTD Cass C-RR Deferrable Mezzanine Term Notes due 2031 (the “Class C-RR Notes) to A1.
The Class C-RR Notes are secured by a collateral pool comprised of corporate bonds with a Weighted Average Rating Factor of 2697 which, by Moody’s standards is the approximate equivalent of a B2 rating.
The Class C-RR Notes are deeply subordinated where 80% of the 2014-2 CLO Notes secured by the collateral pool need to be fully repaid before principal on the Class C-RR Notes can be repaid.
How can such a deeply subordinated obligation secured by a collateral pool with an average rating six notches below investment grade (or deep into the “junk” bond category and designated as “Highly Speculative”) achieve a relative default risk five notches superior to the City of Chicago’s General Obligation credit?
MUseQ® is an analytical framework that applies the same rating agency metrics that drive the massive credit arbitrage seen in corporate bond securitizations such as the one referenced above to public finance credit structure which reveals that the relative default risk described above is indefensible despite Moody’s claim that its “ratings and analysis speak to the relative credit risk of debt instruments and securities across industries and asset classes around the globe.”
Our objective is to create a new generation of transformative financial architecture for the municipal issuer that benefits from the same rating dynamics applied to corporate bond based structured credits. By unifying credit analysis across these asset classes, the relative strength of municipal credits can be formally established to the great benefit of the municipal issuer.
We believe this approach will facilitate greater access for the municipal issuer, at more aggressive price levels, to the vast global pools of ESG-social purpose driven capital searching for new investment opportunities.
Patented financial architecture and credit structure
Flexible amortization protocols
Leverages the subordinated liens of existing credits
Preserves the leveraging capacity and credit strength of the issuer’s senior, publicly sold credits
No hidden risk
If you are a municipal issuer, MUseQ® can provide broader access to capital and help you connect with a larger pool of investors.
If you’re a public finance industry professional, MUseQ® can help create improved capital market opportunities for your municipal clients.
Access a new pool of investment opportunities with more realistic evaluation of risk across asset classes.
Access a new pool of investment opportunities, open up new tax-advantaged options with more realistic evaluation of risk
Expand your options for the low-risk portion of your portfolio, which is timely in today’s financial landscape.
Put your money to work in more socially meaningful ways, supporting and bettering communities.
Helps make investing in U.S. municipal bond market more transparent and easier to navigate for international investors
What happens when the next environmental or social crisis arrives and interest rates are high, federal government funds are not available, and access to capital is limited?
How will government agencies continue to provide key social services and maintain core infrastructure?
In order to ensure stability during future periods of stress, which are expected to happen more often and with greater intensity, we believe it is imperative that municipal issuers take immediate steps to broaden and diversity their capital market access.
We are proven structured finance professionals with over thirty years of capital markets experience. While our primary focus has been in the U.S. public finance markets, we have also been active participants in the markets of many of the world’s other major asset classes.
It is this in-depth exposure to the broadest possible range of capital market credits and pricing dynamics that allowed us to create the integrated MUseQ® framework.
The evolution of a new generation of municipal structured credits
The evolution of a new generation of municipal structured credits
The best solution to instability in the sovereign debt markets is to create more sustainable repayment structures when the debt is originally created thereby significantly reducing the likelihood of default.
The focus of evolving a new financial architecture, so needed in the sovereign debt market, should be squarely on transactional structure at origination, not on institutionalizing more issuer friendly debt work-out protocols.
For the sovereign debt of emerging nations, the onerousness and instability of the obligations is often created upon origination in the form of large amounts of debt coming due in short periods of time (typically denominated in foreign currency) that rely on refinancing as the primary form of repayment.
Why do thousands of municipal issuers across the United States benefit from capital market conventions that allow them to repay debt over extended periods of time, periods that are generally consistent with the useful life of the projects and services being financed, when such rational debt structure and market conventions are not applied to emerging nation borrowers who are most in need of them?
All financial operations are conceptual, based on convention, and as such are always evolving. In a world living under the reality of multiple existential threats, with vast numbers of people living in poverty and under threat of famine, disease, or environmental calamity, where capital flows impact the lives of all the world’s citizens, it is necessary that we, as a global community, examine the entities in control of this evolution and whose interests they are serving.
Given the vast pools of capital dedicated to ESG and social impact purposes, the manner in which the world’s public finance community engages with the capital markets can have a profound social/environmental impact.
We are interested in engaging with all capital market participants dedicated to evolving the system in ways that achieve a better allocation of available non-concessionary , market driven capital to social and environmental purpose at borrowing costs that reflect the true credit value of the public finance issuer.
MUseQ® consists of and/or includes services in the nature of providing structured finance consulting expertise related to financial securities and structured Finance analytical services.
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