To determine the appropriate extent to which IBERDROLA SA should utilize hybrid bonds over the next 18 months, we need to evaluate the company's financial profile, capital structure, and recent market behavior.

1. **Total Adjusted Capital (TAC) Calculation**:
   - **Equity** (as of Dec 31, 2022): ~€58.11 billion.
   - **Net Debt**: Total financial liabilities are around €69.30 billion (Current: €25.08 billion + Noncurrent: €44.22 billion). Subtracting cash and cash equivalents of €4.61 billion gives an approximate Net Debt of ~€64.69 billion.
   - **Total Adjusted Capital (TAC)**: €58.11 billion + €64.69 billion = ~€122.8 billion.

2. **Historical Issuance & Current Hybrid Stock**:
   Iberdrola has been an active issuer of hybrid bonds since 2013 and issued €2.74 billion worth of perpetual subordinated bonds in 2021. The interest expense tied to perpetuals ("Devengo De Intereses De Obligaciones Perpetuas Subordinadas") was €169 million in 2022, pointing to an outstanding hybrid stock of roughly €8 billion to €8.5 billion. Representing roughly 6.5% to 7.0% of their Total Adjusted Capital, this historically aligns perfectly with a strategic ~7.5% hybrid layer.

3. **Leverage & Rating Constraints**:
   Iberdrola's S&P FFO / Net Debt ratio is 19.65%, and the Net Debt / EBITDA ratio stands at 3.91x. These robust but closely managed metrics highlight that the company has a moderately constrained rating headroom to preserve its solid Investment Grade credit rating (usually requiring FFO/Net Debt to remain stably above 18% for its rating bucket). Furthermore, Moody’s views their adjusted leverage trend as "Stable," which corresponds with a strategy that balances debt issuance, retained earnings, and hybrid bond capacity. 

4. **Strategic Uses & Macroeconomic Cost**:
   Like many of its peers in the regulated utility and unregulated power sectors, Iberdrola faces consistent and substantial capital expenditure requirements for the energy transition (renewables, grid infrastructure). Hybrid bonds are a key pillar in financing this capex without over-burdening traditional debt metrics, as S&P allocates 50% equity credit to such hybrids. Given that the 2022 swap curves and credit spreads have heightened the cost of issuing sub-debt significantly compared to 2020-2021, the cost of issuing hybrids will slightly increase their current cost of debt. A moderate hybrid capital target appropriately balances the benefits of equity credit with the increasing cost of servicing these instruments.

Recommending a 7.5% allocation recognizes Iberdrola’s historical commitment to an established hybrid footprint, while utilizing this capacity for moderate refinancing and robust capex needs to maintain its target credit metrics.

<answer>7.5%</answer>