Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 208

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 208
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 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 credit facility would contain covenants that, among other things, likely would limit MIY’s ability to pay distributions in certain circumstances, incur additional debt, change
certain of its investment policies and engage in certain transactions, including mergers and consolidations, and require asset coverage ratios in addition to those required by the 1940 Act. MIY may be required to pledge its assets and to maintain a
portion of its assets in