To determine the extent to which Bouygues’ capital structure should rely on hybrid bonds, we need to assess its financial profile, leverage, interest coverage, cash flow generation, and the market context (interest rates and credit spreads).

**1. Financial Position and Leverage**
- **Total Equity (2022):** €13.9B, up from €12.8B in 2021. Equity is solid.
- **Net Debt (2022):** €7.44B, a huge jump from €0.94B in 2021, largely due to the acquisition of Equans (cash used in obtaining control of subsidiaries was €6.27B in 2022 vs €0.38B in 2021).
- **Leverage (Net Debt/Equity):** 7.44/13.93 ≈ 53%. This is a significant increase from 7% the prior year. Post-acquisition leverage is materially higher.

**2. Profitability and Coverage**
- **Operating Profit (Recurring):** €1.962B in 2022, up from €1.693B in 2021.
- **Profit for the Period:** €1.131B, down from €1.305B (due to higher interest and a loss from associates).
- **Cost of Net Debt:** €198M in 2022, up from €155M.
- **Interest Coverage (Operating Profit / Cost of Net Debt):** 1,962/198 ≈ 9.9x. This is very healthy coverage, even with the increased debt.

**3. Cash Flow Generation**
- **Cash from Operations:** €2.978B in 2022 (down from €3.576B due to working capital changes, but still robust).
- **Free Cash Flow (Operating CF - Capex):** 2,978 - 2,625 = €353M. Post-acquisition, FCF is positive but tighter than before.

**4. Market Conditions (2022)**
- **Swap Rates:** Skyrocketed. 5Y from -0.26% (2021) to 1.73% (2022); 10Y from 0.05% to 1.93%.
- **Credit Spreads (iShares Core Euro Corp Bond yield):** Average 1.085% in 2022, up from 0.733% in 2021. Sub-senior IG delta-adjusted yield was ~2.3%.
- **Cost of Hybrid Debt:** In this rising rate + widening spread environment, new hybrid issuance would be expensive. The after-tax cost would likely exceed the company's current average cost of debt significantly.

**5. Suitability of Hybrids**
- **Pros:** Hybrids receive partial equity credit from rating agencies (typically 50%), which would help manage the spike in leverage from the acquisition without issuing common equity. They can also preserve cash via optional deferral.
- **Cons:** They are more expensive than senior debt, especially in a high-rate/high-spread environment. Bouygues’ existing interest coverage is strong, but adding subordinated, high-coupon debt would increase fixed charges. The company already has a diversified funding structure, and its operating cash flow easily services senior debt.

**Conclusion:**
Bouygues has experienced a one-time, transformative acquisition that spiked net debt. However, it remains an investment-grade company with excellent interest coverage and strong cash flow. Some hybrid issuance would make sense to optimize the capital structure for rating agency treatment without diluting shareholders. However, relying entirely or heavily on hybrids would be unnecessarily costly given the company’s ability to service plain vanilla senior debt and use internal cash flow to deleverage over time. A moderate allocation, around 25%, allows for equity credit benefits while keeping overall funding costs reasonable. The company does not need extreme measures (50%+) given its fundamentals.

<answer>25%</answer>