Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 243

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 243
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B
Floaters held by the TOB Trust and will be subject to an increased interest rate based on number of days the loan is outstanding.

MVF may
invest in a TOB Trust on either a non-recourse or recourse basis. When MVF invests in TOB Trusts on a non-recourse basis, and the TOBs Liquidity Provider is required to
make a payment under the liquidity facility, the TOBs Liquidity Provider will typically liquidate all or a portion of the MVF Municipal Bonds held in the TOB Trust and then fund the balance, if any, of the Liquidation Shortfall. If MVF invests in a
TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the TOBs Liquidity Provider pursuant to which MVF is required to reimburse the TOBs Liquidity Provider the amount of any Liquidation Shortfall. As a result,
if MVF invests in a recourse TOB Trust, MVF 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, municipal securities of MVF that are deposited into a TOB Trust are investments
of MVF and are presented on MVF’s Schedule of Investments and outstanding TOB Floaters issued by a TOB Trust are presented as liabilities in MVF’s Statement of Assets and Liabilities. Interest income from the underlying municipal
securities is recorded by MVF 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 MVF. In addition, under
accounting rules, loans made to a TOB Trust sponsored by MVF may be presented as loans of MVF in MVF’s financial statements even if there is no recourse to MVF’s assets.

For TOB Floaters, generally, the interest rate earned will be based upon the market rates for MVF 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 MVF Municipal Bonds deposited in
the TOB Trust, the holder of the TOB Floaters relies upon the terms of the agreement with the financial institution