Ferrovial’s profile suggests only a limited case for incremental hybrid issuance over the next 18 months.

Key considerations:

- **Existing hybrid starting point:** Ferrovial already has hybrid-like equity securities on the balance sheet, with “Other Equity Securities” of about **€508 million** at year-end 2022. The data also indicates **no new hybrid bonds were issued in 2021 or 2022**, which is a strong signal that hybrids have not recently been a preferred funding tool. The annual movement in perpetual subordinated bonds was slightly negative, not expansionary.

- **Business profile:** Ferrovial is primarily a transportation infrastructure group with large infrastructure-project assets. This sector can support stable cash flows where concessions and contractual frameworks are predictable, but Ferrovial also has construction and development exposure, equity-accounted infrastructure stakes, and project-level debt. Its profile is not equivalent to a low-risk regulated utility.

- **Leverage and funding needs:** Gross borrowings are substantial, especially infrastructure-project debt, and total noncurrent borrowings increased materially. However, Ferrovial also held very large cash balances of about **€5.1 billion**, including **€5.0 billion excluding infrastructure projects**, which mitigates near-term refinancing pressure. Current borrowings were about **€877 million**, lower than the prior year. This does not point to very high immediate refinancing pressure requiring a large hybrid program.

- **Cash flow and investment intensity:** Operating cash flow was strong at about **€1.0 billion**, but investing cash flow was negative, driven by infrastructure investment and investments in associates. Shareholder remuneration was also material. This creates some rationale for capital-structure flexibility, but not enough to justify approaching the S&P 15% equity-credit cap.

- **Profitability and credit headroom:** 2022 net profit attributable to owners was only **€186 million**, well below 2021, which was boosted by large disposals/fair-value effects. Operating profit improved versus 2021 on an underlying basis, but finance costs remain meaningful. A modest hybrid layer could help preserve rating flexibility, but there is no evidence of acute downgrade risk or a transformational acquisition/capex program that would require high hybrid usage.

- **Cost environment:** Market rates rose sharply in 2022. The 5Y and 10Y swap curves moved from near-zero/negative levels to around **1.7%-1.9%**, and subordinated spreads also widened. Hybrid issuance would likely be materially more expensive than senior debt and would increase cash coupon burden. This argues against a large issuance, especially given Ferrovial’s strong liquidity.

Overall, Ferrovial has **some leverage optimization rationale** because of infrastructure capex, sizeable project debt, and existing hybrid capital, but its strong cash position, lack of recent hybrid issuance, and higher hybrid cost argue against a meaningful increase. A small amount, corresponding to **3.75% of total adjusted capital**, is the most balanced recommendation: useful optionality without over-relying on expensive subordinated capital.

<answer>3.75%</answer>