Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 202

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 202
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 management technique or to protect against any increase in the price
of securities MIY anticipates purchasing at a later date. MIY may enter into these transactions primarily as a hedge or for duration or risk management rather than as a speculative investment. However, MIY also may invest in MMD Swaps and SIFMA
Swaps to seek to enhance return or gain or to increase MIY’s yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short-term and long-term interest rates).

MIY may purchase and sell SIFMA Swaps in the SIFMA swap market. In a SIFMA Swap, MIY exchanges with another party their respective commitments
to pay or receive interest (e.g., an exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap Index). Because the underlying index is a tax-exempt index, SIFMA
Swaps may reduce cross-market risks incurred by MIY and increase MIY’s ability to hedge effectively. SIFMA Swaps are typically quoted for the entire yield curve, beginning with a seven day floating rate index out to 30 years. The duration of a
SIFMA Swap is approximately equal to the duration of a fixed-rate MIY Municipal Bond with the same attributes as the swap (e.g., coupon, maturity, call feature).

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MIY may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap permits
MIY to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a portion of its portfolio as a duration management technique or to protect against any increase in the price of
securities to be purchased at a later date. By using an MMD Swap, MIY can create a synthetic long or short position, allowing MIY to select the most attractive part of the yield curve. An MMD Swap is a contract between MIY and an MMD Swap provider
pursuant to which the parties agree to make payments to each other on a notional amount, contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a specified level on the expiration date of the contract. For
example, if MIY buys an MMD Swap and the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration date, the counterparty to the contract will make a payment to MIY equal to the specified level minus the
actual