What appears to be a major due diligence mistake has left the Lehigh County Authority (LCA) unable to meet the required debt service coverage on $291.5 million in tax-exempt revenue bonds it sold in 2013 to fund a water/wastewater concession with Allentown, Pa.

The bonds sold by Goldman Sachs were rated “A” by Standard & Poors on the stability of user fee revenues from the concessioned system acquired from Allentown. Ballard Spahr was lender’s counsel.