A2A is a large Italian utility group with substantial regulated/asset-heavy operations, high capital intensity, and a sizeable balance sheet. These characteristics can make hybrid bonds useful because they can support long-term funding needs while receiving partial equity treatment from rating agencies and preserving financial flexibility.

Key considerations:

- Leverage increased materially in 2022. Liabilities rose from €13.69bn to €16.90bn, while equity increased only modestly from €4.30bn to €4.47bn. The liabilities-to-equity ratio moved from about 3.2x to about 3.8x.
- Financial debt also rose: noncurrent financial liabilities increased from €4.32bn to €5.87bn, and current financial liabilities rose from €0.75bn to €1.02bn. This suggests meaningful refinancing and funding needs.
- The company remains profitable and cash-generative, with EBITDA of €1.51bn and operating cash flow of €1.26bn in 2022, but net profit declined from €550m to €448m due largely to higher taxes and market conditions.
- Free cash flow turned positive at €118m, but capex and acquisitions remained large, consistent with ongoing infrastructure investment requirements.
- Market rates rose sharply in 2022. Swap rates moved from near zero/negative levels in 2021 to around 1.7%–1.9% in 2022, and corporate/hybrid spreads also increased. This makes excessive hybrid issuance costly.
- Hybrid bonds are generally more expensive than senior debt, especially in a higher-rate environment. Therefore, relying too heavily on hybrids would pressure finance costs.
- However, a moderate hybrid component can be attractive for a utility with high capex, as it helps protect credit metrics without immediate shareholder dilution.

Overall, the company should use hybrid bonds as a meaningful but not dominant part of its capital structure. A 0% allocation would ignore the balance-sheet support benefits; 75% or 100% would be too expensive and aggressive; 50% would likely be excessive given rising rates and solid access to conventional debt. A 25% reliance is the most balanced option.

<answer>25%</answer>