Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 234

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 234
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Other
BlackRock-advised funds may contribute MVF Municipal Bonds to a TOB Trust into which MVF has contributed MVF Municipal Bonds. If multiple BlackRock-advised Funds participate in the same TOB Trust, the economic rights and obligations under the TOB
Residual will generally be shared among MVFs ratably in proportion to their participation in the TOB Trust.

The MVF Municipal Bonds transferred to a TOB
Trust typically are high grade MVF Municipal Bonds. In certain cases, when MVF Municipal Bonds transferred are lower grade MVF Municipal Bonds, the TOB Trust transaction includes a credit enhancement feature that provides for the timely payment of
principal and interest on the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for the payment of the credit enhancement fee and MVF, as a TOB Residual holder, would be responsible for reimbursement of any
payments of principal and interest made by the credit enhancement provider.

The TOB Residuals held by MVF generally provide MVF with the right to cause
the holders of a proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued interest. Thereafter, MVF may withdraw a corresponding share of the MVF Municipal Bonds from the TOB Trust. As a result, a TOB
transaction, in effect, creates exposure for MVF to the entire return of the MVF Municipal Bonds in the TOB Trust, with a net cash investment by MVF that is less than the value of the MVF Municipal Bonds in the TOB Trust. This multiplies the
positive or negative impact of the MVF Municipal Bonds’ return within MVF (thereby creating leverage). The leverage within a TOB Trust depends on the value of the MVF Municipal Bonds deposited in the TOB Trust relative to the value of the TOB
Floaters it issues.

MVF may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly leveraged if the principal amount of
the TOB Floaters issued by the related TOB Trust exceeds 75% of the principal amount of the MVF Municipal Bonds owned by the TOB Trust.

The leverage
attributable to MVF’s use of TOB Residuals may be “called away” on relatively short notice and therefore may be less permanent than more traditional forms of leverage. The TOB Trust may be collapsed without the consent of MVF upon the
occurrence