Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 193

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 193
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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 pay or receive interest (e.g., an exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap Index). Because the underlying index is a tax-exempt index, SIFMA
Swaps may reduce cross-market risks incurred by MIY and increase MIY’s ability to hedge effectively. SIFMA Swaps are typically quoted for the entire yield curve, beginning with a seven day floating rate index out to 30 years. The duration of a
SIFMA Swap is approximately equal to the duration of a fixed-rate MIY Municipal Bond with the same attributes as the swap (e.g., coupon, maturity, call feature).

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MIY may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap permits
MIY