Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 196

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 196
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. The net amount of the excess, if any, of MIY’s
obligations over its entitlements with respect to each interest rate swap will be accrued on a daily basis, and MIY will segregate or designate on its books and records liquid assets having an aggregate NAV at least equal to the accrued excess.

If there is a default by the other party to an uncleared interest rate swap transaction, generally MIY will have contractual remedies pursuant
to the agreements related to the transaction. With respect to interest rate swap transactions cleared through a central clearing counterparty, a clearing organization will be substituted for the counterparty and will guarantee the parties’
performance under the swap agreement. However, there can be no assurances that the clearing organization will satisfy its obligation to MIY or that MIY would be able to recover the full amount of assets deposited on its behalf with the clearing
organization in the event of the default by the clearing organization or MIY’s clearing broker. Certain U.S. federal income tax requirements may limit MIY’s ability to engage in interest rate swaps. Distributions attributable to
transactions in interest rate swaps generally will be taxable as ordinary income to shareholders.

Counterparty Credit Standards.

To the extent that MIY engages in principal transactions, including, but not limited to, OTC options, forward currency transactions, swap
transactions, repurchase and reverse repurchase agreements and the purchase and sale of bonds and other fixed-income securities, it must rely on the creditworthiness of its counterparties under such transactions. In certain instances, the credit
risk of a counterparty is increased by the lack of a central clearing house for certain transactions, including certain swap contracts. In the event of the insolvency of a counterparty, MIY may not be able to recover its assets, in full or at all,
during the insolvency process. Counterparties to investments may have no obligation to make markets in such investments and may have the ability to apply essentially discretionary margin and credit requirements. Similarly, MIY will be subject to the
risk of bankruptcy of, or the inability or refusal to perform with respect to such investments by, the counterparties with which it deals. The Investment Advisor will seek to minimize MIY’s exposure to counterparty risk by entering into such
transactions with counterparties the Investment Advisor believes to be creditworthy at the time it enters into the transaction. Certain option transactions and Strategic Transactions may require MIY to provide collateral to secure its performance
obligations under a contract, which would also entail counterparty