Hera S.p.A. is a regulated multi-utility with a generally supportive business-risk profile, but its 2022 financials show clear pressure on leverage and cash flow.

Key considerations:

- **No prior hybrid issuance:** Hera has not issued hybrid bonds in 2021 or 2022 and has never issued them. This is a strong negative signal for recommending a high hybrid proportion, because it suggests hybrids are not a normal or preferred funding tool for the company.
- **Leverage is elevated:** S&P net debt / EBITDA of **4.23x** is moderately high for an investment-grade regulated utility, and S&P FFO / net debt of **17.33%** indicates limited but not extreme headroom.
- **Credit trend is deteriorating:** Moody’s adjusted leverage trend is explicitly **deteriorating**, supporting some rationale for capital-structure optimization.
- **Cash flow weakened sharply in 2022:** Operating cash flow fell to only **€35.7 million** from **€1.05 billion** in 2021, mainly because of a large working-capital absorption. This points to temporary but material funding pressure.
- **Capex and investment needs remain meaningful:** Investing cash outflow was about **€758 million**, including substantial intangible and infrastructure investment. Hera also raised significant new noncurrent borrowings in 2022, with proceeds of about **€2.13 billion**, showing high funding requirements.
- **Equity base remains solid:** Equity increased to **€3.64 billion**, and the company remains sizeable and diversified. There is no evidence of transformational M&A or an existential rating-preservation need.
- **Hybrid cost environment is less favorable:** Euro rates rose materially in 2022, and subordinated spreads also widened. Hybrid issuance would likely increase the cost of funding versus senior debt, reducing the attractiveness of aggressive hybrid use.

Overall, Hera has a legitimate case for **some** hybrid issuance because leverage is under pressure, cash flow was weak, and investment needs are material. However, the absence of any historical hybrid issuance is a strong reason not to recommend a large allocation. The situation looks more like **moderate leverage optimization** rather than a need to maximize S&P equity credit.

Therefore, the most appropriate recommendation is **3.75% of total adjusted capital**.

<answer>3.75%</answer>