Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 195

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 195
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 pay or receive interest (e.g., an exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap Index). Because the underlying index is a tax-exempt index, SIFMA
Swaps may reduce cross-market risks incurred by MIY and increase MIY’s ability to hedge effectively. SIFMA Swaps are typically quoted for the entire yield curve, beginning with a seven day floating rate index out to 30 years. The duration of a
SIFMA Swap is approximately equal to the duration of a fixed-rate MIY Municipal Bond with the same attributes as the swap (e.g., coupon, maturity, call feature).

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MIY may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap permits
MIY 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. By using an MMD Swap, MIY can create a synthetic long or short position, allowing MIY to select the most attractive part of the yield curve. An MMD Swap is a contract between MIY and an MMD Swap 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 MIY buys an MMD Swap 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 MIY 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, MIY will make a payment to the counterparty equal to the actual level
minus the specified level, multiplied by the notional amount of the contract.

In connection with investments in SIFMA and MMD Swaps,
there is a risk that municipal yields will move in the opposite direction than anticipated by MIY, which would cause MIY to make payments to its counterparty in the transaction that could adversely affect MIY’s performance.

MIY has no obligation to enter into SIFMA Swaps or MMD Swaps and may elect not to do so