Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 66

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 66
---
 | the effect of leverage in a declining market, which is likely to cause a greater decline in the NAV of the                                   
 common shares than if the Acquiring Fund were not leveraged, which may result in a greater decline in the market price of the common shares; |

| (4) | when the Acquiring Fund uses financial leverage, the management fee payable to the Investment Advisor will 
 be higher than if the Acquiring Fund did not use leverage; and                                             |

25

| (5) | leverage may increase operating costs, which may reduce total return. |

Any decline in the NAV of the Acquiring Fund’s investments will be borne entirely by the holders of common shares. Therefore, if the market value of the Acquiring Fund’s portfolio declines, leverage will result in a greater decrease in NAV to the common shareholders than if the Acquiring Fund were not leveraged. This greater NAV decrease will also tend to cause a greater decline in the market price for the common shares. While the Acquiring Fund may from time to time consider reducing any outstanding leverage in response to actual or anticipated changes in interest rates in an effort to mitigate the increased volatility of current income and NAV associated with leverage, there can be no assurance that the Acquiring Fund will actually reduce any outstanding leverage in the future or that any reduction, if undertaken, will benefit the holders of common shares. Changes in the future direction of interest rates are very difficult to predict accurately. If the Acquiring Fund were to reduce any outstanding leverage based on a prediction about future changes to interest rates, and that prediction turned out to be incorrect, the reduction in any outstanding leverage would likely operate to reduce the income and/or total returns to the holders of common shares relative to the circumstance where the Acquiring Fund had not reduced any of its outstanding leverage. The Acquiring Fund may decide that this risk outweighs the likelihood of achieving the desired reduction to volatility in income and share price if the prediction were to turn out to be correct, and determine not to reduce any of its outstanding leverage as described above. The Acquiring Fund currently utilizes leverage through the issuance of VRDP Shares and investments in TOB Residuals (see “—Tender Option Bond Risk” and “The Acquiring Fund’s Investments—Investment Objective and Policies—Leverage—Tender Option Bond Transactions”). The Acquiring Fund may enter into derivative instruments, including investments in TOB Residuals, with leverage embedded in them. See “Risk Factors—General Risks of Investing in the Acquiring Fund—Strategic