Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 226

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 226
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 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 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. MVF will ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or gain. An MMD Rate Lock is a contract
between MVF and an MMD Rate Lock 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.

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For example, if MVF buys an MMD Rate Lock 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 MVF 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, MVF 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 entering into MMD Rate Locks, there is a risk that municipal yields will move in the direction opposite of the direction anticipated by MVF. MVF may not enter into MMD Rate Locks if, as a result, more than 50% of its total assets would
be required to cover its potential obligations under its hedging and other investment transactions