Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 184

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 184
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 securities if, immediately after the issuance of such senior securities, MVT would
have an asset coverage ratio (as defined in the 1940 Act) of less than 300% with respect to senior securities representing indebtedness (i.e., for every dollar of indebtedness outstanding, MVT is required to have at least three dollars of
assets) or less than 200% with respect to senior securities representing preferred shares (i.e., for every dollar of preferred shares outstanding, MVT is required to have at least two dollars of assets). The 1940 Act

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also provides that MVT may not declare distributions, or purchase its stock (including through tender offers) if, immediately after doing so, it will have an asset coverage ratio of less than
300% or 200%, as applicable. Under the 1940 Act, certain short-term borrowings (such as for cash management purposes) are not subject to these limitations if (i) repaid within 60 days, (ii) not extended or renewed, and (iii) not
in excess of 5% of the total assets of MVT.

Preferred Shares.MVT has leveraged its portfolio by issuing VMTP Shares. Under the
1940 Act, MVT is not permitted to issue preferred shares if, immediately after such issuance, the liquidation value of MVT’s outstanding preferred shares exceeds 50% of its assets (including the proceeds from the issuance) less liabilities
other than borrowings (i.e., the value of MVT’s assets must be at least 200% of the liquidation value of its outstanding preferred shares). In addition, MVT would not be permitted to declare any cash dividend or other distribution on its
common shares unless, at the time of such declaration, the value of MVT’s assets less liabilities other than borrowings is at least 200% of such liquidation value.

For tax purposes, MVT is currently required to allocate tax-exempt interest income, net
capital gain and other taxable income, if any, between its common shares and preferred shares outstanding in proportion to total dividends paid to each class for the year in which or with respect to
which tax-exempt income, 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, MVT 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
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