To assess the appropriate level of hybrid bond issuance for Terna S.p.A., we must analyze its current financial position, capital expenditure (capex) intensity, and the strategic rationale for hybrid capital.

1.  **Financial Position and Capital Structure:** Terna maintains a solid financial profile. As of Dec 31, 2022, the company has an equity base of approximately €6.17 billion (including €989 million of existing hybrid bonds). The company has demonstrated strong cash flow generation from operating activities, which grew from €0.83 billion in 2021 to €2.32 billion in 2022.
2.  **Capex and Funding Needs:** Terna, as a regulated national electricity grid operator, is characterized by very high, sustained capex intensity required for the development and maintenance of critical national infrastructure. The company’s Property, Plant, and Equipment increased from €15.3 billion to €16.2 billion in 2022, reflecting significant ongoing investment.
3.  **Rationale for Hybrid Capital:** Hybrid bonds provide "equity credit," which is highly beneficial for a regulated utility that needs to maintain a strong investment-grade credit rating while funding substantial, non-discretionary long-term infrastructure projects. Given the transition toward renewable energy, Terna’s infrastructure requirements remain high. Utilizing hybrid bonds allows the entity to optimize its capital structure without diluting existing common equity, thereby preserving credit metrics (such as FFO-to-debt) which are critical in the regulated utility sector.
4.  **Market Context:** The cost of debt has risen significantly (as evidenced by the 2022 rise in swap curves), making the efficient management of the capital structure essential. While the cost of hybrid debt is higher than senior debt, the "equity" classification by rating agencies provides sufficient rating headroom to justify the issuance. 
5.  **Assessment:** Terna’s infrastructure requirements are high but are part of a stable, long-term regulated program rather than a "transformational" M&A spike. Given the company’s existing hybrid base (already ~16% of total equity) and the desire to balance financial flexibility with the rising interest rate environment, a moderate approach to further issuance is prudent to support its capital investment program without excessive interest expense burden. A 7.5% allocation represents a balanced approach to supporting ongoing investment while managing the cost of capital.

<answer>7.5%</answer>