I need to analyze whether Iberdrola should utilize hybrid bonds relative to S&P's 15% equity credit cap on hybrids.

## Key Analysis

### 1. Current Hybrid Usage
From the financial statements, I can identify hybrid instruments:
- "Instrumentos De Capital Con Caracteristicas De Pasivo Financiero No Corriente" (Non-current): 576M EUR (2022), 525M EUR (2021)
- "Instrumentos De Capital Con Caracteristicas De Pasivo Financiero Corriente" (Current): 87M EUR (2022), 100M EUR (2021)
- Total hybrid instruments on balance sheet: ~663M EUR

Additionally, there are perpetual subordinated bonds referenced in equity movements:
- "Emision De Obligaciones Perpetuas Subordinadas" - 2,740M EUR issued in FY2021
- "Devengo De Intereses De Obligaciones Perpetuas Subordinadas" - 169M EUR in FY2022
- Non-controlling interests include substantial amounts that may relate to hybrid instruments

### 2. Total Adjusted Capital Calculation
- Total Equity: 58,114M EUR
- Total Debt (financial liabilities): Non-current financial liabilities 44,216M + Current financial liabilities 25,079M = 69,295M EUR
- Total Adjusted Capital ≈ 58,114 + 69,295 = ~127,409M EUR

### 3. S&P's 15% Cap
- 15% of ~127,409M = ~19,111M EUR maximum equity credit from hybrids
- Since S&P typically gives 50% equity credit to qualifying hybrids, the maximum hybrid issuance would be roughly ~38,222M EUR to fully utilize the cap

### 4. Current Hybrid Position
The company appears to have meaningful hybrid issuance (perpetual subordinated bonds in NCI ~2,740M + instruments with financial liability characteristics ~663M), but this is well below the theoretical cap.

### 5. Rationale for Hybrid Usage
- **Favorable**: Iberdrola is a large, investment-grade utility with massive capital expenditure needs (PP&E grew from ~80B to ~86B). Hybrids provide equity-like credit while being tax-deductible.
- **Capital intensive**: Construction in progress of 11.5B EUR shows significant ongoing investment
- **Rising interest rates**: Swap curves jumped significantly in 2022, making the cost of hybrid debt higher but still potentially attractive vs. pure equity dilution
- **Credit spreads**: The sub-senior delta is 0.2, meaning the additional cost of subordination is moderate
- **Strong cash flows**: Operating cash flows of 10.4B EUR support debt service
- **Already using hybrids**: The company has demonstrated willingness to use hybrids (2.74B issuance in 2021)
- **Leverage**: Total debt/equity ratio is meaningful (~69B/58B ≈ 1.2x), suggesting room for hybrid optimization

### 6. Assessment of Utilization Level
The company is a large, stable utility with predictable cash flows - an ideal hybrid issuer. They're already actively using hybrids but haven't maximized the S&P cap. Given:
- Strong investment-grade profile
- Capital-intensive business needing ongoing financing
- Already established hybrid program
- Moderate leverage that benefits from equity credit
- Rising rates making pure equity more expensive relatively

However, they currently use significantly less than the full cap. The existing hybrids (~3.4B) vs. potential cap (~19B equity credit, or ~38B in hybrid face value) suggests they're using roughly 10-15% of the available capacity.

For a utility of this size and credit quality, maximizing hybrid usage makes strategic sense but there are practical limits (market appetite, cost considerations with rising rates). A reasonable recommendation would be moderate-to-high utilization.

Given the company's existing hybrid program, strong utility profile, and capital needs, but considering rising interest rates and that they haven't historically maximized this capacity, I'd estimate they should utilize about 75% of the S&P cap.

<answer>75%</answer>