I need to analyze whether TenneT Holding B.V. should utilize hybrid bonds at 0%, 25%, 50%, 75%, or 100% of S&P Global Ratings' 15% cap on equity credit for hybrids relative to total adjusted capital.

## Step 1: Understand the Current Capital Structure

First, let me identify the current equity and debt components:

**Equity (2023-01-01):**
- Equity Attributable to Ordinary Equity Holders: €5,133M
- Hybrid Capital: €2,125M
- **Total Equity: €7,713M**

**Debt (2023-01-01):**
- Long-term Borrowings: €19,006M
- Short-term Borrowings: €709M
- **Total Debt: €19,715M**

**Total Adjusted Capital = Debt + Equity = €19,715M + €7,713M = €27,428M**

## Step 2: Calculate Current Hybrid Capital Ratio

Current hybrid capital as % of total adjusted capital:
- €2,125M / €27,428M = **7.75%**

This is already below the 15% S&P cap, meaning TenneT has room to increase hybrid usage.

## Step 3: Analyze the Company's Financial Profile

**Key Characteristics:**
- **Regulated utility (TSO - Transmission System Operator):** Stable, predictable cash flows from regulated transmission charges (€7,517M of €8,299M revenue)
- **Capital intensive:** Heavy PPE investments (€26,823M), with €4,424M capex in 2022
- **Negative profitability:** Operating losses (-€976M in 2022, -€275M in 2021), driven by rising costs
- **Negative equity returns:** Comprehensive loss of -€726M in 2022
- **High leverage:** Debt/Equity ratio of ~2.6x (€19,715M/€7,713M)
- **Strong financing access:** Successfully raised €7,338M in borrowings and €1,230M in equity contributions in 2022
- **Government owned:** Parent is Dutch State, providing implicit support

## Step 4: Assess Hybrid Bond Suitability

**Positive factors for hybrid bonds:**
- Regulated utility with stable, essential infrastructure revenues
- Government ownership provides credit support
- Capital-intensive business with long-lived assets matching hybrid perpetual/long-dated nature
- Need for equity-like capital without diluting state ownership
- Current hybrid usage (7.75%) is well below 15% cap

**Negative factors:**
- Negative profitability reduces ability to service discretionary coupons
- Rising interest rate environment (2022 swap curves turned positive after years of negative rates)
- Already high leverage

## Step 5: Interest Rate Environment Analysis

The swap curves show dramatic shift from negative/flat in 2020-2021 to significantly positive in 2022:
- 10Y swap: from -0.143% (2020) to 1.927% (2022)
- Corporate bond spreads also widened

This means:
- **Higher cost for new hybrid issuance** compared to historical levels
- However, still potentially cheaper than pure equity (which state owner may be reluctant to provide)
- Fixed-rate hybrids could lock in rates before further rises

## Step 6: Optimal Utilization Assessment

Given the 15% S&P cap, the options represent:
- 0% = €0 hybrid capacity (already has €2,125M, so this means eliminate)
- 25% = €0.53B additional capacity (total ~€2.66B)
- 50% = €1.06B additional capacity (total ~€3.19B)
- 75% = €1.59B additional capacity (total ~€3.72B)
- 100% = €2.12B additional capacity (total ~€4.25B, reaching 15% cap)

**Analysis:**
- The company already uses hybrids at 7.75% of adjusted capital (roughly 50% of the 15% cap)
- As a regulated utility with stable cash flows, hybrids are well-suited to match long-term infrastructure assets
- The company has significant capex needs (€4.4B annually) and negative free cash flow
- Government ownership means equity injections are politically sensitive; hybrids offer flexibility
- However, negative profitability means coupon deferral risk exists, though government support mitigates this

**Key consideration:** The company is already at ~50% of the S&P cap utilization. Given:
- Stable regulated revenues provide confidence in servicing
- Negative profitability but government-backed status
- Need for substantial ongoing capex
- Rising but still manageable rate environment

The most prudent approach for a BBB/BBB+ type credit (typical for TSOs) would be to **fully utilize** the hybrid capacity up to the 15% cap. This maximizes equity-like capital without dilution, provides regulatory capital benefits, and matches long-duration assets. The government ownership and essential utility status provide sufficient credit quality to support this.

However, given the negative profitability and rising rate environment, being slightly conservative (75% of cap, or ~11.25% of adjusted capital) could be warranted. But for a regulated utility with state backing, full utilization to 100% of the cap is generally appropriate and common practice.

<answer>100%</answer>