Company: MYI
Filing Date: 2025-07-16
Form Type: N-14 8C
Source: 0001193125-25-159991
Chunk: 174

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-07-16
Form: N-14 8C
Chunk 174
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 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, MVT can create a synthetic long or short position, allowing MVT to select the most attractive part of the yield curve. An MMD Swap is a contract between MVT 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 MVT 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 MVT 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, MVT 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 MVT, which would cause MVT to make payments to its counterparty in the transaction that could adversely affect MVT’s performance.

If there is a default by the other party to an uncleared interest rate swap transaction, generally MVT will have contractual remedies pursuant
to the agreements related to the transaction. With respect to interest rate swap transactions cleared through a central clearing counterparty, a clearing organization will be substituted for the counterparty and will guarantee the parties’
performance under the swap agreement. However, there can be no

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assurances that the clearing organization will satisfy its obligation to MVT or that MVT would be able to recover the full amount of assets deposited on its behalf with the clearing organization
in the event of the default by the clearing organization or MVT’s clearing broker. Certain U.S. federal income tax requirements may limit MVT’s ability to engage in interest rate swaps. Distributions attributable to transactions in
interest rate swaps generally will be taxable as ordinary income to stockholders.

Counterparty Credit Standards. To the extent
that MVT engages in principal transactions, including,