Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 194

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 194
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 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 Swaps and SIFMA
Swaps to seek to enhance return or gain or to increase MIY’s yield, for example, during periods of steep interest rate yield curves (i.e., wide differences between short-term and long-term interest rates).

MIY may purchase and sell SIFMA Swaps in the SIFMA swap market. In a SIFMA Swap, MIY exchanges with another party their respective commitments
to