Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 224

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 224
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. If a credit event occurs, the seller generally must pay the buyer the “par
value” (full notional value) of the swap in exchange for an equal face amount of deliverable obligations of the reference entity described in the swap, or the seller may be required to deliver the related net cash amount (the difference
between the market value of the reference obligation and its par value), if the swap is cash settled. MVF may be either the buyer or seller in the transaction. If MVF is a buyer and no credit event occurs, MVF may recover nothing if the swap is held
through its termination date. However, if a credit event occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may
have significantly decreased. As a seller, MVF generally receives an upfront payment or a fixed rate of income throughout the term of the swap, which typically is between six (6) months and three years, provided that there is no credit event.
If a credit event occurs, generally the seller must pay the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As the
seller, MVF would effectively add leverage to its portfolio because, in addition to its total net assets, MVF would be subject to investment exposure on the notional amount of the swap.

Credit default swap agreements involve greater risks than if MVF had invested in the reference obligation directly since, in addition to
general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risks. MVF will enter into credit default swap agreements only with counterparties the Investment Advisor believes to be creditworthy at the
time they enter into such transactions. A buyer generally also will lose its investment and recover nothing should no credit event occur and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable
obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the full notional value it pays to the buyer, resulting in a loss of value to the seller.

Municipal Market Data Rate Locks. MVF may purchase and sell Municipal Market Data Rate Locks (“MMD Rate Locks”). An MMD
Rate Lock permits MVF to lock in a specified municipal interest rate for a portion of