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Fitch's assessment of the Bancolombia subsidiary was "driven by the potential support it would receive from its parent if needed."

Mayor Enrique Penãlosa wants to raise some $1.35 billion USD for transportation projects, but he is facing strong opposition from labor and the Social Party of National Unity.

Interestingly, this loan — for 990 billion Colombian pesos — wasn't due until February 2024.

Fitch's Latin American Sovereign Overview report reflects the weakness in economies throughout the region, with Colombian banks facing major headwinds.

The biggest risk for the economy is that Santos has now lost too much political capital to get tax reform passed this year.

"The record number of sovereign downgrades in 2016 overwhelmingly reflects weaknesses in emerging markets," says Tony Stringer of Fitch Ratings.

The ratings agency gave a BBB- rating to Corpbanca Colombia's viability rating, as well as its long-term local and foreign currency issuer default ratings (IDR).

Brazilian firms took the brunt of the punishment, with 56 domestic corporates getting hit with downgrades last year.

The downgrades for two of Colombia's largest banks come just weeks after a series of negative ratings actions throughout the nation.

While the plight of Estraval was a disaster of its own making, the rating agency cautions that lax regulation of non-bank financial institutions could give rise to more problems.