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Tellimer upgrades Bolivia's bonds to 'buy' post-election

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Centrist Paz leads with over 32% of the vote, runoff

likely

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Economy in turmoil with looming debt repayments

(Updates prices, adds background and investor quote)

By Johann M Cherian

Aug 18 (Reuters) - Bolivia's international dollar bonds

hit a record high on Monday after early official results put the

ruling socialist party on track for its worst election defeat in

a generation.

Investors hoped a turn away from the leftist party that has

dominated the country since 2006 could help Bolivia turn around

its ailing economy, avoid a debt default and pave the way for an

International Monetary Fund program.

Eduardo del Castillo, the Movement for Socialism's

candidate, only secured roughly 3%, according to initial

results.

Bolivia's bond maturing in 2030 rose more than 3 cents

on the dollar to bid at 79.88 cents, according to Tradeweb data,

adding to a rally that has placed them among the top performers

in JPMorgan's emerging markets bond index.

Centrist senator Rodrigo Paz led with just over 32% of

the vote in initial results, while Conservative former president

Jorge "Tuto" Quiroga of the Alianza coalition was second with

nearly 27%.

"It feels like a best case outcome for the country - at

least in the medium term," said Ajata Mediratta, partner at

Greylock Capital Management. "But the challenges facing the

ultimate victor are daunting in the short-term."

Full official results will be announced within seven days,

and if no candidate obtains more than 40% of the vote, there

will be a runoff on October 19.

London-based investment firm Tellimer upgraded its

recommendation on the country's bonds to 'buy' from 'sell'

following the election outcome.

The South American nation of 12 million people is mired in

an economic crisis marked by record-low foreign exchange

reserves, inflation at a four-decade high and looming debt

payments.