ArrowMark Financial : Semi-Annual Report - June 30, 2022

Semi-Annual Report

June 30, 2022 (unaudited)

NASDAQ | BANX	ir.arrowmarkfinancialcorp.com

ARROWMARK FINANCIAL CORP.
(Formerly StoneCastle Financial Corp.)
Table of Contents
	Page
Consolidated Schedule of Investments.................................................................	3
Consolidated Statement of Assets and Liabilities ..................................................	7
Consolidated Statement of Operations ................................................................	8
Consolidated Statements of Changes In Net Assets ..............................................	9
Consolidated Statement of Cash Flows ................................................................	10
Consolidated Financial Highlights........................................................................	11
Notes to Consolidated Financial Statements ........................................................	12
Dividends and Distributions.................................................................................	25
Tax Information ..................................................................................................	27
Additional Information........................................................................................	27
Results of Stockholders Meeting..........................................................................	28
Management......................................................................................................	29
Privacy Notice ....................................................................................................	34

ArrowMark Financial Corp.

(formerly StoneCastle Financial Corp.) Consolidated Schedule of Investments (unaudited)

As of June 30, 2022

		# of
		Shares/Par
Company(1)	Investment	Amount(2)	Fair Value(3)

Term Loans - 12.2%

Banking - 12.2%

American Capital Bancorp	Subordinated Term Loan, 9.00%, 4/01/2028	$	7,000,000	$ 6,982,500
Equity Bancshares Inc.	Subordinated Term Loan, 7.00%, 6/30/2030	$	5,000,000	5,050,000
F.N.B.C. of La Grange, Inc.	Subordinated Term Loan, 6.38%, 1/1/2030(4)	$	700,000	640,500
TransPecos Financial Corp.	Senior Term Loan, 9.00%, 10/01/2028	$	4,000,000	3,900,000
Tulsa Valley Bancshares	Subordinated Term Loan, 6.38%,
	12/31/2028(4)	$	1,700,000	1,555,500
	Total Term Loans
	(Cost $18,400,000)			18,128,500
Structured Debt Securities - 12.1%
Banking - 12.1%
Community Funding 2018, LLC.	Preferred Shares (Estimated effective yield
	9.61%), 144A(5)(6)	$ 20,260,000	16,781,358
U.S. Capital Funding I, Ltd. / U.S	Subordinate Income Note, (Estimated effective
Capital Funding I, Corp.	yield 8.85%), 5/1/2034, 144A(5)	$	4,700,000	1,151,500
	Total Structured Debt Securities
	(Cost $20,898,239)			17,932,858
Regulatory Capital Relief Securities - 103.2%
Banking - 103.2%	Credit Linked Note, 8.39%, 9/24/2025(7)
Absolute	$ 10,995,000	10,736,068
Algonquin	Guarantee Linked Note, 8.50%, 5/1/2027(7)+	$	5,000,000	4,997,987
Castelo	Credit Linked Note, 9.00%, 8/15/2037(8)*	€	4,200,000	4,323,485
CHAKRA	Credit Linked Note, 9.15%, 6/26/2027(9)(10)+	$	4,000,000	3,980,000
Colonnade	Credit Linked Note, 12.00%, 4/30/2030(7)(9)	$ 10,000,000	9,961,058
Colonnade	Credit Linked Note, 12.40%, 12/15/2029(9)(10)	$	5,000,000	5,149,283
Colonnade	Credit Linked Note, 11.88%, 4/30/2028(9)(10)	$	6,000,000	6,134,367
Colonnade	Credit Linked Note, 11.88%, 11/30/2029(9)(10)	$	7,500,000	7,189,031
CRAFT	Credit Linked Note, 10.00%, 4/30/2028(10)	$	7,518,050	7,157,560
CRAFT	Credit Linked Note, 8.50%, 2/21/2031(9)(10)	$	3,200,000	3,040,000
Elvetia	Credit Linked Note, 8.00%, 10/20/2029(11)+	CHF2,000,000	2,079,296
Elvetia	Credit Linked Note, 9.25%, 10/20/2030(11)+	CHF3,000,000	3,095,375
FCT Colisee	Credit Linked Note, 10.49%, 12/20/2023(12)+	€	4,238,938	4,398,930
FCT Opale	Credit Linked Note, 7.20%, 5/5/2030(10)+	$	4,000,000	3,993,898
Future Ready Chakra	Credit Linked Note, 8.00%, 12/15/2030(7)+	$	5,000,000	4,899,250
Mespil	Credit Linked Note, 10.00%, 12/08/2031(7)*	$	5,000,000	4,913,500
Muskoka	Guarantee Linked Note, 3.80%,
	9/10/2024(9)(10)*	$	4,000,000	4,002,400
Nansa	Credit Linked Note, 9.40%, 3/1/2026(8)*	€	6,567,447	6,715,114
Nightingale LF	Credit Linked Note, 10.75%, 4/1/2028(9)(13)*	£	2,000,000	2,381,526
Premium Green PLC	5 Year Secured Amortizing Floating Rate Note,
	10.80%, 12/20/2024(10)+	$	4,059,621	4,030,226
Premium Green PLC	5 Year Secured Amortizing Floating Rate Note,
	9.60%, 6/29/2026(12)*	€	3,449,681	3,538,571
Premium Green PLC	5 Year Secured Amortizing Floating Rate Note,
	9.50%, 11/10/2026(12)+	€	3,400,000	3,369,151
Pymes Magdalena	Credit Linked Note, 8.00%, 12/20/2052(8)*	€	4,722,410	4,837,005
Resonance	Credit Linked Note, 7.49%, 10/25/2029(12)*	€	1,772,849	1,828,828
Resonance	Credit Linked Note, 8.00%, 10/5/2028(8)*	€	5,300,000	5,481,237

See Notes to financial statements.

Semi-AnnualReport | ArrowMark Financial Corp.

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		# of
		Shares/Par
Company(1)	Investment	Amount(2)	Fair Value(3)

Regulatory Capital Relief Securities (continued)

Banking (continued)

Salisbury	Credit Linked Note, 10.00%, 4/17/2028(9)(13)+	£	4,500,000	$	5,358,871
Salisbury	Credit Linked Note, 9.75%, 3/20/2028(13)+	£	800,000		939,269
Salisbury	Credit Linked Note, 10.50%, 6/16/2027(13)+	£	5,235,795		5,988,544
Salisbury	Credit Linked Note, 12.10%, 6/16/2027(13)+	£	1,959,645		2,275,279
Start	Credit Linked Note, 10.00%, 6/16/2025(7)+	$	5,000,000		4,909,750
Syntotta	Credit Linked Note, 8.70%, 11/4/2037(8)*	€	1,998,607		2,047,315
Terra	Credit Linked Note, 7.90%, 9/25/2029(7)*	$	10,000,000		9,700,000
	Total Regulatory Capital Relief Securities
	(Cost $160,555,670)				153,452,174
Trust Preferred and Preferred Securities - 4.6%
Banking - 4.6%
Fidelity Federal Bancorp	Fixed Rate Cumulative Perpetual Preferred
	Stock, Series A, 9%	$	4,789,000		4,669,275
Fidelity Federal Bancorp	Fixed Rate Cumulative Perpetual Preferred
	Stock, Series B, 9%	$	200,000		195,000
Raymond James Financial, Inc.	Fixed/Floating Perpetual Preferred Stock,
	Series A, 6.75%		80,000		1,988,000
	Total Trust Preferred and Preferred
	Securities
	(Cost $7,010,703)				6,852,275
	Total Long-Term Investments
	(Cost $206,864,612)				196,365,807
Money Market Fund - 0.5%
Morgan Stanley Institutional	Institutional Share Class - Money Market
Liquidity Funds - Treasury	Mutual Fund (MISXX) 1.34%
Portfolio			690,000		690,000
	Total Money Market Fund
	(Cost $690,000)				690,000
	Total Investments
	(Cost $207,554,612)(14)(15) - 132.6%				197,055,807
	Other assets and liabilities, net - (32.6)%(16)		(48,395,118)
	Total Net Assets - 100.0%			$148,660,689

1. We do not control and are not an affiliate of any of our investments, each as defined in the Investment Company Act (the 1940 Act ).
2. Par Value in USD, GBP, EUR or CHF.
3. Fair Value is determined in good faith in accordance with the Company's valuation policy and is reviewed and accepted by the Company's Board of Directors.
4. The estimated effective yield including structuring fees paid annually through maturity of 2030 and 2028, respectively, is 9.60%.
5. Securities are exempt from registration under Rule 144A of the Securities Act of 1933.
6. The preferred shares are considered an equity position. Equity investments are entitled to recurring distributions which are generally equal to the remaining cash flow of the payments made by the underlying company's securities less contractual payments to debt holders and company expenses. The estimated effective yield indicated is based upon a current projection of the amount and timing of these recurring distributions and the estimated amount of repayment of principal upon termination. Such projections are periodically reviewed and adjusted as needed. The estimated effective yield may ultimately not be realized.
7. Floating rate note: SOFR + minimum of 7.90%
8. Floating rate note: 3M EURIBOR (Floored at 0%) + minimum of 8.00%
9. Investments determined using significant unobservable inputs (Level 3). The value of such securities is $ 47,196,536 or 31.75% of net assets.
10. Floating rate note: 3M LIBOR + minimum 3.80%
11. Floating rate note: 3M CHF LIBOR + minimum 8.00%
12. Floating rate note: 3M EURIBOR + minimum 7.49%
13. Floating rate note: SONIA + minimum 9.75%

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ArrowMark Financial Corp.| Semi-AnnualReport

See Notes to financial statements.

1. As of June 30, 2022, the tax cost basis of investment securities was $207,554,612. The gross unrealized appreciation over tax cost was $872,692 and gross unrealized depreciation under tax cost was $11,371,497. Net unrealized depreciation of tax cost under value was $10,498,805.
2. Cost values reflect accretion of original issue discount or market discount, and amortization of premium.
3. Includes $51,500,000 in bank loans from Texas Capital Bank.

• Held in Marshall Holdings Limited III. * Held in Marshall Holdings Limited II.

Forward foreign currency contracts outstanding as of June 30, 2022 were as follows:

						Unrealized
						Appreciation
Currency Purchased		Currency Sold	Expiration	Counterparty	(Depreciation)
USD	5,023,510	CHF	5,000,000	07/15/22	BNYM	$(218,858)
USD	36,737,922	EUR	35,171,052	07/15/22	BNYM	(155,895)
USD	17,632,272	GBP	14,501,535	07/15/22	BNYM	(25,056)
						$(399,809)
BNYM	Bank of New York Mellon
CHF	Swiss Franc
EUR	Euro
EURIBOR	Euro London Interbank Offered Rate
GBP	British Pound
LIBOR	London Interbank Offered Rate
PLC	Public Limited Company
SOFR	Secured Overnight Financing Rate
SONIA	Sterling Overnight Interbank Average Rate

See Notes to financial statements.

Semi-AnnualReport | ArrowMark Financial Corp.

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