To determine the appropriate level of hybrid bonds for REN - Redes Energéticas Nacionais, SGPS, S.A., we must evaluate its financial metrics, funding needs, and the impact on its capital structure and credit profile.

**1. Current Financial Profile and Leverage Metrics (as of Dec 31, 2022):**
- Total Equity: €1,517.534 million
- Long-term Borrowings: €1,695.362 million
- Current Borrowings: €638.944 million
- Total Debt (Long-term + Current): €2,334.306 million
- Total Adjusted Capital (Equity + Debt): €3,851.840 million
- Current Leverage (Debt / Capital): 60.6%
- EBITDA (approx. Operating Profit + D&A): €239.721m + €249.276m = €489.0 million
- FFO to Debt (approx. EBITDA - Net Finance Cost - Tax): €489.0m - €45.7m - €54.3m = €389.0m / €2,334.3m ≈ 16.7%

**2. Funding Needs and Leverage Pressure:**
REN faces a somewhat elevated but managed refinancing need with €638.9 million in current borrowings, though this is partially offset by an operating cash flow of €613.5 million. Looking forward, the company maintains a high capex intensity, spending €201.6 million on intangible assets (concession assets) in 2022, which represents a heavy reinvestment profile typical of regulated utilities. While the leverage of 60.6% is not critically high, it is moderately elevated, and the FFO-to-Debt metric sits at a weaker level for a regulated utility targeting a solid investment-grade rating. A hybrid issuance would meaningfully optimize the adjusted leverage metrics and restore rating headroom.

**3. Cost of Hybrid vs. Current Cost of Debt:**
- Current Cost of Debt: Finance costs of €67.4 million on total debt of €2,334.3 million imply a current effective cost of roughly 2.9%.
- Hybrid Cost Estimate: Using the 2022 10-year swap rate (1.927%) + iShares Core Euro Corp Bond spread (1.085%) + sub-senior delta (0.2%) = ~3.2%. 
A hybrid coupon would slightly increase the current cost of debt (a ~30 bps premium), which aligns well with the "7.5%" criteria. Additionally, the notably inverted swap curve in 2022 (5Y at 1.726%, 10Y at 1.927%) incentivizes issuing longer-dated instruments like hybrids to lock in attractive long-term rates before potential further curve inversions or rate shifts.

**4. S&P Equity Credit Cap & Issuance Size:**
- 15% Cap on Total Adjusted Capital: 15% × €3,851.8m = €577.8m.
- As of the provided data, REN has €0 in outstanding hybrid bonds. Thus, the full capacity up to 15% is available.
- A 7.5% issuance amounts to €288.9 million, comfortably within the €3 billion annual limit. This size meaningfully bolsters equity (propping up FFO/Debt and Debt/Capital ratios) without being overly aggressive, satisfying a "moderate refinancing or acquisition need" and meaningfully improving adjusted leverage metrics.

Given the moderately constrained rating headroom, the significant capex needs for concession assets, and the marginal/slight increase in the cost of debt relative to the current average, an issuance targeting 7.5% of total adjusted capital provides the optimal balance of leverage optimization and cost efficiency.

<answer>7.5%</answer>