Iberdrola is a large, regulated/infrastructure-heavy utility with substantial and growing capex needs, stable operating cash flow, and meaningful leverage. Hybrid bonds can be useful for this profile because rating agencies often grant partial equity credit, helping preserve credit metrics while funding long-duration assets.

Key considerations:

- **Leverage is material:** Total liabilities at 2022 year-end were about EUR 96.6bn against equity of EUR 58.1bn. Financial liabilities are substantial, with noncurrent financial liabilities of EUR 44.2bn and current financial liabilities of EUR 25.1bn.
- **Cash generation is strong:** Operating cash flow increased to EUR 10.4bn in 2022, supporting debt capacity.
- **Investment needs are high:** Investing cash flow was about EUR -10.2bn, driven mainly by property, plant and equipment purchases. This supports using long-term financing instruments, including hybrids.
- **Hybrid-like instruments already exist:** The balance sheet includes “instruments of capital with characteristics of financial liability” of about EUR 663m current/noncurrent combined, and the equity statement shows perpetual subordinated obligations in prior years. So hybrids are already part of the toolkit.
- **Interest-rate environment worsened sharply in 2022:** Euro swap rates rose materially, and subordinated / hybrid spreads are higher than senior corporate debt. The sub-senior delta is around 0.2, meaning hybrids are more expensive than senior debt. This argues against excessive reliance.
- **Credit-quality preservation matters:** For a utility with large regulated assets and long-term investments, moderate hybrid usage can improve rating optics without diluting shareholders, but too much hybrid debt raises coupon burden, refinancing risk, and complexity.

Overall, Iberdrola should use hybrid bonds as a **meaningful but not dominant** part of its capital structure. A moderate allocation best balances equity-credit benefits against higher hybrid funding costs.

<answer>25%</answer>