I need to analyze whether TenneT Holding B.V. should rely on hybrid bonds for 0%, 25%, 50%, 75%, or 100% of its capital structure.

Let me examine the company's current capital structure and financial situation:

**Current Capital Structure (2023-01-01):**
- Total Equity: €7,713 million
  - Ordinary equity holders: €5,133 million
  - Hybrid Capital: €2,125 million
  - Noncontrolling interests: €455 million
- Total Assets: €38,509 million

**Current hybrid capital ratio:** €2,125 / €7,713 = 27.6% of equity, or €2,125 / €38,509 = 5.5% of total assets

**Key Financial Characteristics:**

1. **Regulated utility/TSO (Transmission System Operator):** TenneT is a regulated transmission system operator with stable, predictable cash flows from energy transmission charges (€7,517 million in 2022, up from €4,102 million in 2021). Regulated utilities typically have stable revenue streams.

2. **Heavy capital intensity:** Property, Plant & Equipment is €26,823 million (69.6% of total assets), indicating massive infrastructure investment needs. PP&E grew by €3,012 million year-over-year.

3. **Negative profitability:** The company is loss-making (-€879 million profit/loss in 2022), with operating losses and significant financing needs.

4. **Massive borrowing requirements:** Long-term borrowings grew from €12,366 million to €19,006 million (+€6,640 million). The company is heavily debt-dependent.

5. **Government ownership:** Parent is the Dutch State, implying strong implicit government support and likely investment-grade credit quality.

6. **Cash flow profile:** Operating cash flow is positive (€1,196 million), but investing activities consume heavily (-€4,345 million), requiring significant financing inflows.

**Analysis of Hybrid Bonds Suitability:**

Hybrid bonds are attractive for utilities because:
- They count partially as equity for credit rating purposes (typically 50-100% equity treatment)
- They are cheaper than pure equity
- They provide long-dated capital without dilution
- Regulated utilities can pass through financing costs to customers

However, hybrid bonds also:
- Have higher coupons than senior debt
- Can have coupon deferral features
- May be called by issuers

**Market Environment (2022):**
- Interest rates rose significantly (5Y swap from -0.264% to 1.726%)
- Corporate bond spreads widened
- The iShares Core Euro Corp Bond yield averaged 1.085% in 2022
- Sub-senior non-financial IG averaged 2.295%

**Assessment:**

Given TenneT's profile:
- **Regulated TSO with stable cash flows** → Can support fixed obligations well
- **Massive capital expenditure needs** → Needs flexible, long-term financing
- **Government-owned** → Strong credit support, can access markets easily
- **Currently loss-making but with stable revenue base** → Needs equity-like capital without dilution
- **Already uses hybrid capital** → €2,125 million already in structure (proven market access)

For a regulated utility with stable, regulated revenues and massive infrastructure investment needs, hybrid capital is very suitable. However, going to 100% would be too risky (no true equity buffer). 0% would miss the benefits of cheaper equity-like capital. 75% might be too high given the negative profitability.

The current structure has hybrid capital at about 27.6% of equity. For a regulated utility with government backing and massive capex needs, **50%** seems optimal because:
- It provides substantial equity credit for rating purposes
- Maintains a solid ordinary equity base for true loss absorption
- Balances cost efficiency with financial flexibility
- Matches the long-duration, regulated-asset nature of the business
- Is consistent with peer practices for European TSOs

European TSOs typically target hybrid capital in the 20-50% range of equity. Given TenneT's expanding investment program and the need to maintain investment-grade ratings while funding massive grid expansion (energy transition), a 50% target would optimize the capital structure.

<answer>50%</answer>