Let’s break this down. --- **1. Determine S&P’s hybrid cap in EUR terms** - Hybrid cap = 15% of total adjusted capital (total debt + equity). - At end-2022: - Equity (total) = EUR 14,866.9m - Debt (noncurrent + current financial liabilities excluding lease & concession, plus bank overdrafts): - Noncurrent financial liabilities (excl. concession) = EUR 19,692.1m - Current financial liabilities (excl. concession) = EUR 6,521.4m - Bank overdrafts = EUR 213.6m - Total debt = 19,692.1 + 6,521.4 + 213.6 = EUR 26,427.1m - Total adjusted capital = 14,866.9 + 26,427.1 = EUR 41,294m - 15% cap = 0.15 × 41,294 ≈ EUR 6,194.1m --- **2. Determine existing hybrids** - At end-2022, "Titres Super Subordonnés À Durée Indéterminée" = EUR 3,496.3m (This is the deeply subordinated/perpetual hybrid debt included in equity per IFRS, but considered debt-like for S&P’s adjusted capital.) --- **3. Compare existing hybrids to cap** - Existing hybrids = EUR 3,496.3m - Cap = EUR 6,194.1m - Headroom = ~ EUR 2,697.8m --- **4. Utilization ratio vs. the cap** - Utilization = 3,496.3 / 6,194.1 ≈ 56.4% - So they are already over 50% but under 75% of the cap. --- **5. Qualitative considerations** - Hybrids are expensive relative to senior debt, especially in a rising-rate environment (2022 swap rates >1.7% vs near 0% in 2020–2021). - Veolia just completed a large acquisition (Suez), increasing leverage substantially — it may need equity credit to support the rating. - But it also has significant alternative sources of capital flexibility (asset disposals, equity issuance shown in 2022). - Remaining well under the cap provides future issuance capacity, but maxing out is not necessary or optimal. Given current utilization is ~56%, the answer that most closely reflects their position is **50%**. --- 50%