REDEIA is best viewed primarily as a regulated utility/infrastructure issuer, with relatively predictable operating cash flow, large regulated asset base, and stable earnings. The company’s 2022 financial profile does not point to a need to maximize hybrid use.

Key considerations:

- **Credit profile and business risk:** As a regulated electricity transmission/network group, REDEIA benefits from stable, regulated cash flows and relatively low business volatility. Operating profit remained strong at about **€962 million**, and operating cash flow was robust at about **€1.57 billion**.
- **Leverage and debt position:** Reported financial debt is sizeable, with noncurrent financial liabilities of about **€5.54 billion** and current financial liabilities of about **€1.71 billion**, but the company also held substantial cash and current financial assets. Total equity increased materially to about **€4.89 billion** at year-end 2022, improving capitalization.
- **Funding needs:** Investing cash flow was significantly negative at about **€1.64 billion**, driven by capex, acquisitions/investments, and financial instrument purchases. However, core capex on tangible/intangible assets was about **€536 million**, broadly manageable relative to operating cash flow. The company also repaid more debt than it issued in 2022, suggesting no urgent refinancing stress.
- **Shareholder distributions:** Dividends paid were high at about **€544 million**, but still covered by operating cash flow after core capex. This creates some leverage optimization rationale, but not a severe capital structure need.
- **Hybrid rationale:** Hybrid bonds would provide some equity credit under S&P methodology and improve adjusted leverage metrics. However, there is no evidence of existing hybrids or a severe downgrade-risk situation requiring aggressive use up to the 15% cap.
- **Cost environment:** Euro rates rose sharply in 2022, and subordinated/hybrid spreads were meaningfully above prior years. Hybrid issuance would likely be more expensive than senior debt and increase funding cost, reducing the attractiveness of a large issuance.

Overall, REDEIA has **moderate funding and leverage-management needs**, but not enough pressure to justify a large hybrid allocation. A modest hybrid layer could provide useful rating flexibility and support future investment funding, but maximizing equity credit would be excessive given the stable regulated profile, strong operating cash generation, and manageable capex/refinancing position.

<answer>3.75%</answer>