Italgas is primarily a regulated gas distribution utility, so the relevant framework is the regulated utilities methodology. Its business risk is likely relatively supportive: essential infrastructure, regulated revenues, and generally predictable cash flows. However, the financial profile shows meaningful leverage and funding pressure after a year of heavy investment and acquisition activity.

Key credit considerations:

- **Leverage is high for a regulated utility.**  
  At year-end 2022, financial debt is substantial: short-term financial liabilities of about **€142m** plus long-term financial liabilities of about **€6.4bn**, against equity of **€2.39bn**. Even net of cash of **€452m**, net financial debt is roughly **€6.1bn**. This is materially higher than equity and indicates a capital structure where hybrid equity credit could be useful.

- **Debt increased while liquidity declined.**  
  Cash fell sharply from **€1.39bn** to **€452m**. Total liabilities increased from **€8.01bn** to **€8.64bn**, and long-term financial liabilities rose by about **€617m**. This suggests rising balance-sheet pressure.

- **Capex and M&A funding needs are significant.**  
  Investing cash flow was **negative €1.28bn** in 2022, including:
  - intangible asset purchases of about **€767m**;
  - consolidation/business unit investments of about **€875m**;
  - partially offset by disposals of intangible assets of about **€293m**.  
  This is a large funding requirement relative to operating cash flow of **€548m**.

- **Free cash flow after investments and dividends is deeply negative.**  
  Operating cash flow of **€548m** did not cover investing outflows of **€1.28bn** and dividends of about **€253m**. This implies continued reliance on external financing or balance-sheet capacity.

- **Earnings are stable and improving, but not enough to offset funding pressure.**  
  EBIT increased from **€583m** to **€641m**, and net profit rose from **€383m** to **€436m**. EBITDA, approximated as EBIT plus depreciation/amortization, is about **€1.12bn**, implying net debt/EBITDA around **5.4x**. That is not extreme for a regulated utility, but it is meaningfully levered and could constrain rating headroom.

- **Hybrid cost is likely higher than historical senior debt cost.**  
  The 2022 euro rate environment was materially higher than 2020-2021. The 7-10 year swap curve averaged around **1.8%-1.9%**, and the non-financial investment-grade subordinated premium was about **2.3%**, suggesting hybrid coupon levels could be meaningfully above the company’s embedded finance cost. Finance costs were only **€61m** on more than €6bn of gross financial debt, indicating a very low average cost of debt. This argues against maximum hybrid usage.

- **No evidence of existing hybrids.**  
  Since the starting point appears to be no outstanding hybrid capital, moving directly to the full 15% S&P equity-credit cap would be aggressive unless there were severe downgrade risk or transformational M&A needs.

Overall, Italgas has a strong regulated utility business profile but faces **moderate-to-high leverage pressure**, heavy capex/M&A funding needs, and lower cash balances. Hybrid issuance would be useful to support adjusted credit metrics and preserve rating flexibility, but the higher hybrid coupon and lack of evidence of acute downgrade risk argue against using the full cap. A mid-level allocation is most appropriate.

Therefore, the recommended extent is **7.5% of total adjusted capital**: meaningful enough to improve leverage metrics and provide rating headroom, but not excessive given the cost of hybrid capital and the company’s stable regulated earnings base.

<answer>7.5%</answer>