Iberdrola’s balance sheet shows a net‑debt‑to‑EBITDA ratio of roughly 5.1× and an interest‑coverage ratio (EBIT/interest) of about 2.6×, placing the company in the lower‑investment‑grade category. Rating agencies (e.g., S&P) generally give equity‑credit to hybrid capital only up to about 15 % of total adjusted capital for non‑financial corporates, and many European utilities target around 10‑15 % of total debt in hybrid form to preserve senior‑debt ratings while lowering overall financing costs.  

The current stock of hybrid instruments (≈ 0.6 bn EUR) is less than 1 % of total debt, far below the practical limit. Market data indicate that sub‑senior (hybrid) spreads average roughly 2.3 % above the swap curve, implying a cost of about 4‑4.5 % – cheaper than equity (≈ 8‑10 % for utilities) but higher than senior debt (≈ 3 %). Hence, a modest increase in hybrid financing would reduce the cost of capital relative to issuing new equity while still being treated as equity by the rating agencies, helping to improve the net‑debt‑to‑EBITDA metric without over‑leveraging.  

A level of around 25 % of total debt in hybrid bonds aligns with typical rating‑agency limits, provides a meaningful cost advantage over pure equity, and fits with the company’s capital‑intensive, regulated business model. Higher proportions (≥ 50 %) would push the firm beyond the equity‑credit threshold, raise interest expense materially, and risk down‑rating.  

Therefore, the capital structure should include a moderate reliance on hybrid bonds, around one‑quarter of total debt.

<answer>25%</answer>