Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 211

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 211
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s in a recourse TOB Trust, MIY will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised Funds participate in any such TOB Trust, these losses will be shared ratably, in proportion to their
participation in the TOB Trust.

Under accounting rules, MIY Municipal Bonds of MIY that are deposited into a TOB Trust are investments of
MIY and are presented on MIY’s Schedule of Investments and outstanding TOB Floaters issued by a TOB Trust are presented as liabilities in MIY’s Statement of Assets and Liabilities. Interest income from the underlying MIY Municipal Bonds
is recorded by MIY on an accrual basis. Interest expense incurred on the TOB Floaters and other expenses related to remarketing, administration, trustee and other services to a TOB Trust are reported as expenses of MIY. In addition, under accounting
rules, loans made to a TOB Trust sponsored by MIY may be presented as loans of MIY in MIY’s financial statements even if there is no recourse to MIY’s assets.

For TOB Floaters, generally, the interest rate earned will be based upon the market rates for municipal bonds with maturities or remarketing
provisions that are comparable in duration to the periodic interval of the tender option. Since the tender option feature has a shorter term than the final maturity or first call date of the underlying municipal bonds deposited in the TOB Trust, the
holder of the TOB Floaters relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as well as the credit strength of that institution. The perceived reliability and creditworthiness, of many major
financial institutions, some of which sponsor and/or provide liquidity support to TOB Trusts increases the risk associated with TOB Floaters. This in turn may reduce the desirability of TOB Floaters as investments, which could impair the viability
or availability of TOB Trusts.

Rule 18f-4 under the 1940 Act permits MIY to enter into TOB Trust
transactions and similar financing transactions (e.g., borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the 1940 Act, provided that MIY either (i) complies with the 300% asset coverage
ratio applicable to senior securities representing indebtedness with respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions as derivatives transactions under Rule