Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 204

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 204
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 TOB Trust sponsored by MIY may be presented as loans of MIY in MIY’s financial statements even if there is no recourse to MIY’s assets.

For TOB Floaters, generally, the interest rate earned will be based upon the market rates for municipal bonds with maturities
or remarketing provisions that are comparable in duration to the periodic interval of the

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tender option. Since the tender option feature has a shorter term than the final maturity or first call date of the underlying municipal bonds deposited in the TOB Trust, the holder of the TOB
Floaters relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as well as the credit strength of that institution. The perceived reliability and creditworthiness, of many major financial
institutions, some of which sponsor and/or provide liquidity support to TOB Trusts increases the risk associated with TOB Floaters. This in turn may reduce the desirability of TOB Floaters as investments, which could impair the viability or
availability of TOB Trusts.

Rule 18f-4 under the 1940 Act permits MIY to enter
into TOB Trust transactions and similar financing transactions (e.g., borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the 1940 Act, provided that MIY either (i) complies with the 300%
asset coverage ratio applicable to senior securities representing indebtedness with respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions as derivatives transactions under Rule 18f-4. Future regulatory requirements or SEC guidance may necessitate more onerous contractual or regulatory requirements, which may increase the costs or reduce the degree of potential economic benefits of TOB
Trust transactions or limit MIY’s ability to enter into or manage TOB Trust transactions.

See “Risk Factors
and Special Considerations—General Risks of Investing in the Acquiring Fund—Tender Option Bond Risk” for a description of the risks involved with a TOB issuer.

Credit Facility.MIY is permitted to leverage its portfolio by entering into one or more credit facilities. If MIY
enters into a credit facility, MIY may be required to prepay outstanding amounts or incur a penalty rate of interest upon the occurrence of certain events of default. MIY would also likely have to indemnify the lenders under the credit facility
against liabilities they may incur in connection therewith. In addition, MIY expects that any