Company: MYI
Filing Date: 2025-09-02
Form Type: N-14 8C/A
Source: 0001193125-25-193985
Chunk: 235

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-02
Form: N-14 8C/A
Chunk 235
---
 are presented as liabilities in MVF’s Statement of Assets and Liabilities. Interest income from the underlying municipal securities is recorded by MVF 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 MVF. In addition, under accounting rules, loans made to a TOB Trust sponsored by
MVF may be presented as loans of MVF in MVF’s financial statements even if there is no recourse to MVF’s assets.

For TOB Floaters, generally,
the interest rate earned will be based upon the market rates for MVF 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 MVF 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.

Rule 18f-4 under the 1940 Act permits MVF 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 MVF either (i) complies with the 300% asset coverage ratio applicable to
senior securities representing indebtedness 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 MVF’s
ability to enter into or manage TOB Trust transactions.

See “Risk Factors and Special Considerations—General Risks of Investing in the
Acquiring Fund—Tender Option Bond Risk” for a description of the risks involved with a TOB issuer.

113

Reverse