I'll analyze VERBUND AG's financial position and capital structure to determine the appropriate reliance on hybrid bonds.

**Company Profile:**
VERBUND AG is Austria's leading electricity company, primarily focused on hydropower generation and grid operations. It's a utility with significant infrastructure assets.

**Financial Strength Analysis:**

1. **Profitability:** Revenue doubled from €4.8B to €10.3B (2021→2022), EBITDA doubled from €1.6B to €3.2B, and net profit nearly doubled from €985M to €1.9B. Very strong profitability driven by high energy prices.

2. **Balance Sheet:** Total assets of €19.2B with equity of €8.3B (equity ratio ~43%). Non-current assets of €15.2B dominated by PP&E (€11.9B) - typical capital-intensive utility.

3. **Debt Profile:** Non-current financial liabilities of €2.8B, current financial liabilities of €1.1B. Total financial debt ~€3.9B. Debt-to-equity ratio is moderate at ~0.47x.

4. **Cash Flow:** Operating cash flow of €2.0B in 2022, strong enough to cover capex of €1.1B and dividends of €478M.

5. **Credit Considerations:** Large derivative positions (both assets and liabilities) related to energy trading. Significant cash flow hedge reserves (-€1.1B in equity) indicate active hedging program.

**Hybrid Bond Considerations:**

- **For hybrid bonds:** VERBUND is a regulated utility with stable, infrastructure-backed cash flows - a classic hybrid bond issuer profile. Hybrids can optimize the capital structure by receiving partial equity credit from rating agencies while being tax-deductible. The rising interest rate environment (swap curves jumped significantly in 2022) makes the cost consideration important.

- **Against heavy hybrid reliance:** The company already has a strong balance sheet with ~43% equity ratio. Profitability is exceptionally strong. The company doesn't appear to be under rating pressure. The spread environment (corporate bond spreads and sub-sen deltas) shows increased costs. The company has substantial derivative-related balance sheet volatility.

- **Moderate use:** Utilities commonly use hybrid bonds for 10-25% of their capital structure to optimize rating metrics. VERBUND's strong financials suggest it doesn't need excessive hybrid issuance, but a moderate allocation would be standard practice for a European utility of this size to maintain rating flexibility while funding growth capex (€1.1B+ annually).

Given VERBUND's strong credit profile, solid equity base, significant capex needs for energy transition, and its profile as a large European utility where hybrid bonds are a standard tool but not a dominant one, a moderate 25% allocation to hybrid bonds in the capital structure is appropriate.

<answer>25%</answer>