Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 240

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 240
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 the net capital gain or other taxable income is paid. If net capital gain or other taxable income is allocated to preferred shares,
instead of solely tax- exempt income, MVF will likely have to pay higher total dividends to preferred shareholders or make special payments to preferred shareholders to compensate them for the increased tax liability. This would reduce the total
amount of dividends paid to the common shareholders, but would increase the portion of the dividend that is tax- exempt. If the increase in dividend payments or the special payments to preferred shareholders are not entirely 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

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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