To determine whether ITALGAS S.P.A. is suitable to issue hybrid bonds, we can evaluate its financial position and operational characteristics based on the provided 2022 and 2023 data: 1. **Size and Scale**: The company is very large, with Total Assets growing from €10.15 billion in 2022 to €11.03 billion in 2023, and Revenue and Operating Income around €2.31 billion in 2023. This substantial scale provides the necessary market presence and liquidity to attract hybrid bond investors. 2. **Profitability and Cash Generation**: ITALGAS is highly profitable with stable margins. Net Profit increased from €383 million to €436 million, and Profit from Operating Activities reached €641 million in 2023. Furthermore, Cash Flows from Operations are consistently strong (€548 million in 2023). This guarantees that the company can comfortably service the periodic coupon payments associated with hybrid bonds. 3. **Capital Structure and Leverage**: The company has a capital-intensive profile and high leverage, which is typical for the utility/infrastructure sector. At the end of 2023, Long-Term Financial Liabilities stood at roughly €6.4 billion against Total Equity of €2.39 billion. Because rating agencies generally treat a portion of hybrid bonds as equity rather than pure debt, issuing hybrid instruments would be an excellent strategic tool for ITALGAS to defend its credit rating while continuing to fund its massive capital expenditures (Cash Used in Investing Activities was €1.28 billion in 2023). 4. **Industry Profile**: As a regulated gas distribution utility, the company benefits from highly visible and predictable cash flows. This stability is the exact profile sought after by fixed-income and hybrid investors, who look for limited downside risk. Given its large-cap status, stable utility revenue streams, substantial ongoing capital investments, and a highly leveraged capital structure that would benefit from equity-like funding, ITALGAS S.P.A. fits the classic profile of a premium hybrid bond issuer. Strongly Suitable