Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 190

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 190
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 or gain. MIY may not sell interest rate caps or floors that it does not own. Interest rate
swaps involve the exchange by MIY with another party of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal. The purchase of an
interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate cap. The purchase of an
interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor.

MIY may enter into interest rate swaps, caps and floors on either an asset-based or liability-based basis, and will usually
enter into interest rate swaps on a net basis, i.e., the two payment streams are netted out, with MIY receiving or paying, as the case may be, only the net amount of the two payments on the payment dates. MIY will accrue the net amount of the
excess, if any, of MIY’s obligations over its entitlements with respect to each interest rate swap on a daily basis and will segregate with a custodian an amount of cash or liquid high grade securities having an aggregate net asset value at
all times at least equal to the accrued excess. If there is a default by the other party to such a transaction, MIY will have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in
recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. Caps and floors are more recent innovations for which standardized documentation has not yet
been developed and, accordingly, they are less liquid than swaps.

MIY may enter into interest rate swap transactions such
as MMD Swaps or SIFMA Swaps. To the extent that MIY enters into these transactions, MIY expects to do so primarily to preserve a return or spread on a particular investment or portion of its portfolio as a duration 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