Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 188

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 188
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B Trust.

Under accounting rules, MVT Municipal Bonds of MVT that are deposited into a TOB Trust are investments of MVT and are presented on MVT’s
Schedule of Investments and outstanding TOB Floaters issued by a TOB Trust are presented as liabilities in MVT’s Statement of Assets and Liabilities. Interest income from the underlying MVT Municipal Bonds is recorded by MVT on an accrual
basis. Interest expense incurred on the TOB Floaters and other expenses related to remarketing, administration, trustee and other services to a TOB Trust are reported as expenses of MVT. In addition, under accounting rules, loans made to a TOB Trust
sponsored by MVT may be presented as loans of MVT in MVT’s financial statements even if there is no recourse to MVT’s assets.

For TOB Floaters, generally, the interest rate earned will be based upon the market rates for municipal bonds with maturities or remarketing
provisions that are comparable in duration to the periodic interval of the tender option. Since the tender option feature has a shorter term than the final maturity or first call date of the underlying municipal bonds deposited in the TOB Trust, the
holder of the TOB Floaters relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as well as the credit strength of that institution. The perceived reliability and creditworthiness, of many major
financial institutions, some of which sponsor and/or provide liquidity support to TOB Trusts increases the risk associated with TOB Floaters. This in turn may reduce the desirability of TOB Floaters as investments, which could impair the viability
or availability of TOB Trusts.

95

Rule 18f-4 under the 1940 Act permits MVT to enter
into TOB Trust transactions, reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the 1940 Act, provided that MVT
either (i) complies with the 300% asset coverage ratio with respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions as derivatives transactions under Rule
18f-4.

Future regulatory requirements or SEC guidance may necessitate more onerous contractual or
regulatory requirements, which may increase the costs or reduce the degree of potential economic benefits of TOB Trust transactions or limit MVT’s ability to enter into or manage TOB Trust