Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 229

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 229
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 obligation and
its par value), if the swap is cash settled. MVF may be either the buyer or seller in the transaction. If MVF is a buyer and no credit event occurs, MVF may recover nothing if the swap is held through its termination date. However, if a credit event
occurs, the buyer generally may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As a seller, MVF generally
receives an upfront payment or a fixed rate of income throughout the term of the swap, which typically is between six (6) months and three years, provided that there is no credit event. If a credit event occurs, generally the seller must pay
the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity whose value may have significantly decreased. As the seller, MVF would effectively add leverage to its portfolio
because, in addition to its total net assets, MVF would be subject to investment exposure on the notional amount of the swap.

Credit
default swap agreements involve greater risks than if MVF had invested in the reference obligation directly since, in addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risks. MVF
will enter into credit default swap agreements only with counterparties the Investment Advisor believes to be creditworthy at the time they enter into such transactions. A buyer generally also will lose its investment and recover nothing should no
credit event occur and the swap is held to its termination date. If a credit event were to occur, the value of any deliverable obligation received by the seller, coupled with the upfront or periodic payments previously received, may be less than the
full notional value it pays to the buyer, resulting in a loss of value to the seller.

Municipal Market Data Rate Locks. MVF may
purchase and sell Municipal Market Data Rate Locks (“MMD Rate Locks”). An MMD Rate Lock permits MVF to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a
portion of its portfolio as a duration management technique or to protect against any increase in the price of securities to be purchased at a later date. MVF will ordinarily use these transactions as a hedge or for duration or risk management
although it is permitted to enter into them to enhance income or