**Reasoning**

ERG S.p.A. operates in the unregulated power and gas (renewables) sector, where high capital expenditure and acquisition activity are typical. The company’s 2022 results show strong cash generation (operating cash flow ~€459 m) but also significant investment needs: capex (including right‑of‑use assets) of roughly €334 m and acquisitions of subsidiaries of ~€392 m (total ~€726 m). Over the next 18 months the firm will need to fund ongoing capex, potential new acquisitions, and debt maturities – a funding gap well beyond what internal cash can cover.  

Current leverage is moderate (net debt/EBITDA ~4×, FFO/debt ~19‑26 %) and the rating is likely in the lower‑investment‑grade “BBB” range, with limited headroom for additional senior debt without risking a downgrade. Issuing hybrid bonds would provide equity‑credit, lower adjusted debt, improve leverage metrics, and preserve the investment‑grade rating while only marginally increasing the cost of debt (the hybrid pricing is only slightly above senior levels).  

Given the high capex intensity, large acquisition pipeline, and the need to optimise the capital structure to maintain the rating, the appropriate level of hybrid issuance is the “11.25 %” tier – enough to materially support the leverage trajectory without reaching the extreme “15 %” scenario.

**Final answer**

<answer>11.25%</answer>