Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 178

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 178
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 level,
multiplied by the notional amount of the contract.

In connection with investments in SIFMA and MMD Swaps, there is a risk that municipal
yields will move in the opposite direction than anticipated by MVT, which would cause MVT to make payments to its counterparty in the transaction that could adversely affect MVT’s performance.

If there is a default by the other party to an uncleared interest rate swap transaction, generally MVT 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 MVT or that MVT 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 MVT’s clearing broker. Certain U.S. federal income tax requirements may limit MVT’s ability to engage in interest rate swaps. Distributions attributable to
transactions in interest rate swaps generally will be taxable as ordinary income to stockholders.

Counterparty Credit Standards.
To the extent that MVT engages in principal transactions, including, but not limited to, OTC options, forward currency transactions, swap transactions, repurchase and reverse repurchase agreements

100

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, MVT 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, MVT 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 MVT’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 MVT to provide collateral to secure its performance
oblig