Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 193

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 193
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 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 credit risk.

104

Other Investment Policies

MIY has adopted certain other policies as set forth below.

Index and Inverse Securities

MIY may invest in MIY Municipal Bonds yielding a return based on a particular index of value or interest rates. Also, MIY may invest in so-called “inverse floating obligations” or “residual interest bonds” on which the interest rates typically vary inversely with a short-term floating rate (which
may be reset periodically by a dutch auction, a remarketing agent, or by reference to a short-term tax-exempt interest rate index). MIY may purchase synthetically-created inverse floating
obligations evidenced by custodial or trust receipts.

Call Rights

MIY may purchase a MIY Municipal Bond issuer’s right to call all or a portion of such MIY Municipal Bond for mandatory
tender for purchase (a “Call Right”). A holder of a Call Right may exercise such right to require a mandatory tender for the purchase of related MIY Municipal Bonds, subject to certain conditions. A Call Right that is not exercised prior
to maturity of the related MIY Municipal Bond will expire without value. The economic effect of holding both the Call Right and the related MIY Municipal Bond is identical to holding a MIY Municipal Bond as a
non-callable security. Certain investments in such obligations may be illiquid.

Repurchase Agreements

MIY may invest in securities pursuant to repurchase agreements. Repurchase agreements may be entered into only with a member
bank of the Federal Reserve System or a primary dealer or an affiliate thereof, in U.S. Government securities. A repurchase agreement is a contractual agreement whereby the seller of securities agrees to repurchase the same security at a specified
price on a future date agreed upon by the parties. The agreed-upon repurchase price determines the yield during MIY’s holding period. Repurchase agreements are considered to be loans collateralized by the underlying security that is the
subject of the repurchase contract. The risk to MIY is limited to the ability of the issuer to pay the