Veolia already uses hybrids substantially: deeply subordinated securities increased from about €2.46bn at the start of 2022 to €3.50bn at the start of 2023, helped by the Suez hybrid contribution, while total equity was €14.87bn and financial debt/liabilities were materially higher after the Suez acquisition.

The case for hybrids is reasonably strong because:

- Leverage and balance-sheet size rose sharply after Suez: total assets increased from €53.1bn to €73.3bn, and noncurrent financial liabilities excluding concession liabilities rose from €10.5bn to €19.7bn.
- Hybrids can support rating metrics because S&P typically grants partial equity credit, improving adjusted leverage relative to straight debt.
- The company operates in defensive infrastructure/environmental services, where long-duration cash flows can support permanent or long-dated subordinated capital.
- 2022 rates and spreads rose materially, making hybrid issuance more expensive than in 2020–2021, so maximizing issuance up to the cap is not costless.
- Existing hybrid capital is already meaningful, and the company generated solid operating cash flow of €4.15bn in 2022, so it does not need to rely exclusively on hybrids.

Given the higher leverage from the Suez transaction and the usefulness of rating-agency equity credit, Veolia should use hybrids meaningfully. But because market yields increased sharply in 2022 and hybrids are expensive versus senior debt, it should not necessarily run fully to the S&P cap unless rating pressure requires it. A high but not maximum utilization is therefore most appropriate.

<answer>75%</answer>