Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 194

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 194
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 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 level, multiplied by the notional amount of the contract. If the Municipal Market Data AAA General Obligation Scale is above the specified level on the expiration date, MIY will make a payment to the counterparty equal to the actual level
minus the specified level, multiplied by the notional amount of the contract.

In connection with investments in SIFMA and MMD Swaps,
there is a risk that municipal yields will move in the opposite direction than anticipated by MIY, which would cause MIY to make payments to its counterparty in the transaction that could adversely affect MIY’s performance.

MIY has no obligation to enter into SIFMA Swaps or MMD Swaps and may elect not to do so. The net amount of the excess, if any, of MIY’s
obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and MIY will segregate or designate on its books and records liquid assets having an aggregate NAV at least equal to the accrued excess.

If there is a default by the other party to an uncleared interest rate swap transaction, generally MIY will have contractual remedies pursuant
to the agreements related to the transaction. With respect to interest rate swap transactions cleared through a central clearing counterparty, a clearing organization will be substituted for the counterparty and will guarantee the parties’
performance under the swap agreement. However, there can be no assurances that the clearing organization will satisfy its obligation to MIY or that MIY would be able