Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 202

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 202
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 if, immediately after the issuance of such senior securities, MIY would
have an asset coverage ratio (as defined in the 1940 Act) of less than 300% with respect to senior securities representing indebtedness (i.e., for every dollar of indebtedness outstanding, MIY is required to have at least three dollars of
assets) or less than 200% with respect to senior securities representing preferred shares (i.e., for every dollar of preferred shares outstanding, MIY is required to have at least two dollars of assets). The 1940 Act also provides that MIY
may not declare distributions or purchase its stock (including through tender offers) if, immediately after doing so, it will have an asset coverage ratio of less than 300% or 200%, as applicable. Under the 1940 Act, certain short-term borrowings
(such as for cash management purposes) are not subject to these limitations if (i) repaid within 60 days, (ii) not extended or renewed and (iii) not in excess of 5% of the total assets of MIY.

Preferred Shares.MIY has leveraged its portfolio by issuing preferred shares. Under the 1940 Act, MIY is not permitted to issue preferred shares if,
immediately after such issuance, the liquidation value of MIY’s outstanding preferred shares exceeds 50% of its assets (including the proceeds from the issuance) less liabilities other than borrowings (i.e., the value of MIY’s
assets must be at least 200% of the liquidation value of its outstanding preferred shares). In addition, MIY would not be permitted to declare any cash dividend or other distribution on its common shares unless, at the time of such declaration, the
value of MIY’s assets less liabilities other than borrowings is at least 200% of such liquidation value.

For tax purposes, MIY is
currently required to allocate tax-exempt interest income, net capital gain and other taxable income, if any, between its common shares and preferred shares outstanding in proportion to total dividends paid to
each class for the year in which or with respect to which tax-exempt income, the net capital gain or other taxable income is paid. If net capital gain or other taxable income is allocated to preferred shares,
instead of solely tax-exempt income, MIY will likely have to pay higher total dividends to preferred shareholders or make special payments to preferred shareholders to compensate them for the increased tax
liability. This would reduce the