I need to analyze Fortum Oyj's financial situation to determine the appropriate hybrid bond issuance level. Let me work through this systematically.

## Step 1: Understand Fortum's Business Profile

Fortum is a Finnish energy company. Based on the data, it appears to operate in:
- Regulated utilities (nuclear waste management fund, regulated operations)
- Unregulated power and gas (generation, trading, retail)
- Has significant operations in multiple jurisdictions

Key observation: The massive drop in assets from €149.7B (2022) to €23.6B (2023) indicates a major divestment/discontinued operations - likely the Uniper exit/divestiture.

## Step 2: Analyze Financial Position

**Profitability:**
- 2022: Massive loss of €10.29B (including €11.3B loss from discontinued operations)
- 2021: Small loss of €114M
- Continuing operations profit: €1.01B in 2022 vs €4.01B in 2021
- Comparable operating profit improved: €1.87B (2022) vs €1.43B (2021)
- EBITDA: €1.84B (2022) vs €4.91B (2021)

**Key Issues:**
- Discontinued operations (Uniper) caused massive losses
- Significant impairment and restructuring
- Share of loss from associates: -€629M (2022) vs +€168M (2021)

**Balance Sheet Transformation:**
- Total equity dropped from €13.7B to €7.7B (2022 to 2023)
- Assets collapsed from €149.7B to €23.6B
- This reflects the Uniper divestiture/deconsolidation

**Cash Flow:**
- Operating cash flow continuing operations: €2.1B (2022)
- Operating + investing continuing operations: €3.57B (2022) - actually positive due to divestments
- But discontinued operations consumed massive cash: -€10.87B operating, -€2.45B investing

**Leverage and Credit Metrics:**
- Equity attributable to owners: €7.67B (2023)
- Total equity: €7.74B (2023)
- Debt levels need estimation: Looking at liabilities, total liabilities €15.9B (2023)

## Step 3: Assess Hybrid Bond Rationale

**Current Situation:**
- Major restructuring/divestiture completed (Uniper exit)
- Significantly smaller, more focused company
- Equity base reduced but cleaner structure
- Continuing operations actually profitable (€1.01B)
- Comparable EBITDA €2.44B, with good underlying performance

**Refinancing Needs:**
- Significant debt repayments in 2022: €5.9B non-current borrowings repaid
- Proceeds from borrowings: €2.4B
- Net debt repayment activity
- Dividends still being paid: €1.01B proposed for 2022 (0.91 EUR/share)

**Rating Considerations:**
- Fortum was likely downgraded due to Uniper exposure
- Need to stabilize credit profile post-restructuring
- Nuclear waste management obligations (€966M provision)
- Regulatory environment in Nordic power markets

## Step 4: Apply S&P Criteria

**Business Risk Profile:**
- Mixed regulated/unregulated operations
- Nordic regulatory environment generally strong/adequate
- Scale now smaller post-Uniper
- Some nuclear/renewable assets with long-term contracts

**Financial Risk Profile:**
- Significant leverage pressure from losses
- Need to rebuild equity cushion
- Continuing operations generate decent cash flow
- But overall financial metrics strained by massive losses

**Hybrid Bond Analysis:**

Arguments FOR hybrids:
- Moderate refinancing needs post-restructuring
- Need to optimize capital structure after massive equity erosion
- Rating preservation important
- Hybrid equity credit would improve leverage metrics

Arguments AGAINST maximum hybrids:
- Not in "transformational capex" mode (divesting, not acquiring)
- Cost of hybrids likely higher than pre-crisis
- Continuing operations actually decent; not in survival mode
- No massive growth capex program indicated

**Assessment against guidelines:**

- Not 0%: Company has real leverage optimization needs and rating flexibility would be useful
- Not 3.75%: Too modest given the scale of restructuring and balance sheet repair needed
- Not 11.25% or 15%: Not in "transformational M&A" or "material downgrade risk without hybrid" territory; no massive capex program

**7.5% seems most appropriate:**
- Moderate refinancing needs post-Uniper exit
- Rating headroom moderately constrained after losses
- Hybrid issuance meaningfully improves adjusted leverage metrics (equity credit helpful)
- Cost will slightly increase debt cost but manageable
- Balance sheet repair needed but not desperate
- Continuing operations profitable with €2.4B comparable EBITDA

The company has genuine needs for capital structure optimization after the Uniper debacle, but it's not in distress. The 7.5% level provides meaningful improvement to metrics without over-reliance on hybrid instruments.

<answer>7.5%</answer>