I assume the MUD uses MXP? Otherwise you wouldn't have the problem.
It is amazing how many MUD developers have buggy MXP code, so that they are sending <O> when they should send:
<O>
... when MXP is enabled.
You could conceivably write a plugin that forces < to < when it is not followed by a valid MXP name, but what about this:
Exits: <I>n <B>ank <U>ndertaker
All these are valid MXP codes:
- <I> - italics
- <B> - bold
- <U> - underscore
That means such lines will be rendered incorrectly and there is nothing the client can do to fix it.
I suggest you post a message to the admins of the MUD suggesting they fix up their MXP implementation.
I have a page describing how to do that here:
http://www.gammon.com.au/mushclient/addingservermxp.htm
Even if they don't want to change everything, they can at least fix the code that does exits to make them work properly.