Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 233

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 233
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ly offset by a reduction in the tax liability of, and an increase in the tax-exempt dividends received by, the common shareholders, the advantage of MVF’s leveraged structure to common shareholders
will be reduced.

Tender Option Bond Transactions.MVF currently leverages its assets through the use of TOB Residuals, which are derivative
interests in MVF Municipal Bonds. The TOB Residuals in which MVF will invest pay interest or income that, in the opinion of counsel to the issuer of such TOB Residuals, is exempt from regular U.S. federal income tax. No independent investigation
will be made to confirm the tax-exempt status of the interest or income paid by TOB Residuals held by MVF. Although volatile, TOB Residuals typically offer the potential for yields exceeding the yields
available on fixed rate MVF Municipal Bonds with comparable credit quality.

TOB Residuals represent beneficial interests in a TOB Trust formed for the
purpose of holding MVF Municipal Bonds contributed by one or more funds. A TOB Trust typically issues two classes of beneficial interests: TOB Floaters, which are sold to third party investors, and TOB Residuals, which are generally issued to MVF(s)
that transferred MVF Municipal Bonds to the TOB Trust. MVF may invest in both TOB Floaters and TOB Residuals. TOB Floaters may have first priority on the cash flow from the MVF Municipal Bonds held by the TOB Trust and are enhanced with a liquidity
support arrangement from a third party TOBs Liquidity Provider which allows holders to tender their position at par (plus accrued interest). MVF, as a holder of TOB Residuals, is paid the residual cash flow from the TOB Trust after payment of TOB
Trust expenses and interest on the TOB Floaters. MVF contributes MVF Municipal Bonds to the TOB Trust and is paid the cash received by the TOB Trust from the sale of the TOB Floaters, less certain transaction costs, and typically will invest the
cash to purchase additional MVF Municipal Bonds or other investments permitted by its investment policies. If MVF ever purchases all or a portion of the TOB Floaters sold by the TOB Trust, it may surrender those TOB Floaters together with a
proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate amount of the MVF Municipal Bonds owned by the TOB Trust