Bouygues should make **moderate-to-high use of hybrid bonds**, but not necessarily up to the full S&P cap.

Key considerations:

- **Leverage deteriorated sharply in 2022.** Net debt increased from **€0.9bn to €7.4bn**, mainly due to very large acquisition-related investing cash outflows of about **€6.3bn**. Long-term borrowings doubled from **€5.8bn to €11.6bn**. This creates a clear capital-structure optimization need.

- **Cash generation remains solid but not enough to offset the balance-sheet step-up quickly.** Operating cash flow was **€3.0bn**, while capex on property, plant, equipment and intangibles was **€2.6bn**, leaving limited recurring free cash flow before dividends. Dividends paid were around **€0.8bn**, meaning deleveraging capacity is constrained in the near term.

- **Interest coverage is still comfortable.** Operating profit of **€1.9bn** compares with interest expense of **€231m** and cost of net debt of **€198m**, so the company is not in acute financial distress. This argues against the maximum 15% recommendation.

- **Scale and diversification are strong.** Bouygues is a large, diversified French group with more than **€44bn of revenue**, substantial international operations, and activities across construction, telecoms, media and energy services. This supports credit quality and reduces the need for an extreme hybrid allocation.

- **However, acquisition-driven leverage pressure is significant.** The balance sheet expanded materially, goodwill rose from **€7.4bn to €12.6bn**, and adjusted debt increased substantially. Hybrid issuance would be useful because S&P typically gives partial equity credit to qualifying hybrids, improving adjusted debt-to-capital and leverage measures without issuing common equity.

- **Market cost is less favorable than in 2020–2021.** Euro swap rates rose sharply in 2022, with 5–10 year swaps around **1.7%–1.9%**, and subordinated non-financial IG spreads also widened. Hybrid coupons would therefore increase the cost of funding versus senior debt, but the cost penalty is not prohibitive if used selectively to protect credit metrics after a large acquisition.

- **No evidence of existing hybrid bonds is provided.** This means Bouygues has unused capacity under the S&P 15% equity-credit cap. But given the absence of an existing hybrid base and the higher rate environment, it would be prudent to phase issuance rather than immediately maximize the cap.

Given these factors, the best recommendation is **7.5% of total adjusted capital**. This reflects meaningful leverage pressure and acquisition-related funding needs, while recognizing that Bouygues remains profitable, diversified, liquid, and not in a situation where investment-grade preservation appears fully dependent on hybrids.

<answer>7.5%</answer>