Fitch Ratings on May 31 downgraded the long-term national rating of Nicaragua-based Financiera Fundeser SA to RD(nic) from BB+(nic) and the short-term rating to RD(nic) from B(nic).

The rating agency said the downgrade follows a "selective default on specific obligations with its international creditors and restructuring of the debt that meets the criteria of forced debt swap" in line with its criteria.

Fitch said the company did not disclose in a timely manner a breach in various financial commitments that occurred during the second half of 2018. These were instead disclosed in a financial statement released earlier in 2019.

After the selective breach, Fundeser agreed to a debt restructuring that changed the terms and conditions and also extended maturity terms. Fundeser was also ordered to capitalize $2.6 million of subordinated debt — which Fitch considers a forced debt swap — to avoid potential insolvency or intervention.

On the heels of the debt restructuring, Fitch then raised Fundeser's long- and short-term ratings to C(nic) from RD(nic).