Company: MYI
Filing Date: 2025-09-05
Form Type: 424B3
Source: 0001193125-25-196285
Chunk: 221

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-05
Form: 424B3
Chunk 221
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 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

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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 gain. An MMD
Rate Lock is a contract between MVF and an MMD Rate Lock provider pursuant to which the parties agree to make payments to each other on a notional amount, contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or
below a specified level on the expiration date of the contract. For example, if MVF buys an MMD Rate Lock and the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration date, the counterparty to the
contract will make a payment to MVF equal to the specified level minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data AAA General Obligation Scale is above the specified level on the expiration
date, MVF will make a payment to the counter