To assess the appropriate level of hybrid bond issuance for Fortum Oyj, we evaluate its financial performance and risk profile as of the fiscal year ended December 31, 2022:

1.  **Financial Stress and Leverage:** Fortum experienced a massive decline in financial performance in 2022. The "Profit Loss" dropped to -10.29 billion EUR, significantly impacted by the divestment of Uniper and losses from discontinued operations. "Equity" fell from 13.66 billion EUR in 2022 to 7.74 billion EUR in 2023. While the firm maintains a liquid position (3.9 billion EUR in cash), its leverage ratios have been significantly pressured by the extreme volatility of energy markets, margin calls, and substantial losses.
2.  **Strategic Context:** The company faced significant liquidity challenges in 2022, evidenced by the cash flow from operating activities (continuing operations) being 2.1 billion EUR, while the overall cash position was heavily influenced by massive margin requirements and divestment outflows.
3.  **Rationale for Hybrid Bonds:** Given the erosion of equity and the need to preserve an investment-grade rating amidst the transition and current market environment, Fortum requires capital structure support. Hybrid instruments provide "equity credit" (up to 50% usually in rating agency methodologies), which helps preserve credit metrics without diluting shareholders.
4.  **Guidance Mapping:**
    *   Fortum does not fit the 0% category because its credit metrics have seen severe deterioration, and equity has been significantly impaired.
    *   The situation is more severe than a simple "moderate leverage optimization" (3.75%).
    *   However, it does not currently exhibit a "transformational M&A program" or "material downgrade risk" of the highest severity that would necessitate hitting the absolute 15% cap.
    *   A 7.5% allocation provides meaningful improvement to adjusted leverage metrics and offers necessary rating headroom while keeping the issuance volume within the 3 billion EUR annual capacity constraint and maintaining a balance between cost of debt and capital preservation.

Considering the substantial loss in retained earnings, the decline in total equity, and the need to stabilize the financial profile during a period of significant strategic adjustment, an issuance level of 7.5% of total adjusted capital is a prudent recommendation to support the company’s credit profile.

<answer>7.5%</answer>