Investors can choose between the Hanson 10 per cent loan stock maturing in 2006, the Glaxo stock paying 8.75 per cent and maturing in 2005, the Royal Insurance, 9.625 per cent, 2003 and the British Gas, 8.75 per cent, 2025.
At current prices the Glaxo stock offers an income yield of 8.86 per cent in a PEP, British Gas offers 9.2 per cent, and the other two 9.5 per cent.
Hanson's stock is trading at pounds 105, which means an investor who holds stock worth pounds 100 (face value) until maturity will suffer a pounds 5 loss, but the income over the next 11 years should make up for that.
The minimum investment to buy direct into a corporate bond is pounds 100,000, but by buying in bulk Hargreaves Lansdown will offer single-company PEPs in amounts as small as pounds 3,000.
Unlike conventional corporate bond PEPs, which are invested in a variety of bonds from a number of companies that mature at different dates, the single-company bond PEP will be transparent.
As with all fixed-interest bonds, prices will rise if interest rates fall, and fall if interest rates rise, but investors who hold them until redemption know they will be repaid at par.
There is a broking charge of 0.5 per cent for the PEP, but no initial or withdrawal charges, and the annual management fee is pounds 30, rising in line with inflation. This compares with initial charges of up to 5 per cent and annual fees of 0.5 to 1.5 per cent on most corporate bond PEPs.
Hargreaves Lansdown admits there is an element of risk in having all one's eggs in a single basket, but claims the single-company bond PEP is closer to the ideal the Treasury had in approving corporate bond PEPs than the single-company bond PEPs offered by Legal & General and Johnson Fry, which are invested in their own stock.