UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number 811-06540

 

Name of Fund: BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock MuniYield Quality Fund III, Inc., 55 East 52nd Street, New York, NY 10055

 

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

 

Date of fiscal year end: 07/31/2011

 

Date of reporting period: 10/31/2010

 

Item 1 – Schedule of Investments

 

 

 

 

 

Schedule of Investments October 31, 2010 (Unaudited)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

Alabama — 0.4%

 

 

 

 

 

 

 

Birmingham Special Care Facilities
Financing Authority, RB, Children’s
Hospital (AGC), 6.00%, 6/01/39

 

$

3,605

 

$

3,958,542

 

Alaska — 1.3%

 

 

 

 

 

 

 

Borough of Matanuska-Susitna Alaska,
RB, Goose Creek Correctional Center
(AGC), 6.00%, 9/01/28

 

 

10,150

 

 

11,879,053

 

Arizona — 2.8%

 

 

 

 

 

 

 

Downtown Phoenix Hotel Corp., RB,
Senior Series A (FGIC), 5.00%,
7/01/36

 

 

21,355

 

 

18,135,093

 

Maricopa County & Phoenix Industrial
Development Authorities, Refunding
RB, S/F, Series A-2, AMT
(Ginnie Mae), 5.80%, 7/01/40

 

 

2,320

 

 

2,363,384

 

State of Arizona, COP, Department of
Administration, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

3,725

 

 

3,899,516

 

5.25%, 10/01/28

 

 

1,600

 

 

1,693,360

 

 

 

 

 

 

 

 

 

 

 

 

 

26,091,353

 

California — 13.1%

 

 

 

 

 

 

 

Alameda Corridor Transportation
Authority, Refunding RB, CAB,
Subordinate Lien, Series A (AMBAC),
5.47%, 10/01/24 (a)

 

 

10,000

 

 

8,423,700

 

California Health Facilities Financing
Authority, Refunding RB, St. Joseph
Health System, Series A, 5.75%,
7/01/39

 

 

1,550

 

 

1,647,681

 

California HFA, RB, Home Mortgage,
Series K, AMT, 5.50%, 2/01/42

 

 

5,835

 

 

5,953,567

 

California State University, RB,
Systemwide, Series A (NPFGC),
5.00%, 11/01/32

 

 

9,865

 

 

9,973,614

 

California State University, Refunding
RB, Systemwide, Series A (AGM),
5.00%, 11/01/37

 

 

3,545

 

 

3,644,012

 

California Statewide Communities
Development Authority, RB (AGM):

 

 

 

 

 

 

 

St. Joseph Health System, Series E,
5.25%, 7/01/47

 

 

9,000

 

 

9,275,940

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

California (continued)

 

 

 

 

 

 

 

California Statewide Communities
Development Authority, RB (AGM)
(concluded):

 

 

 

 

 

 

 

Sutter Health, Series D, 5.05%,
8/15/38

 

$

750

 

$

773,333

 

City of Redding California, COP,
Refunding, Series A (AGM), 5.00%,
6/01/30

 

 

1,900

 

 

1,985,272

 

City of San Jose California, Refunding
RB, Series A, AMT (AMBAC), 5.50%,
3/01/32

 

 

11,965

 

 

12,285,662

 

County of Sacramento California, RB,
Senior Series A (AGM), 5.00%,
7/01/41

 

 

15,000

 

 

15,295,800

 

Fairfield-Suisun Unified School District
California, GO, Election of 2002
(NPFGC), 5.50%, 8/01/28

 

 

5,800

 

 

6,266,552

 

Los Angeles Municipal Improvement
Corp., RB, Series B1 (NPFGC), 4.75%,
8/01/37

 

 

14,000

 

 

13,545,840

 

Mendocino-Lake Community College
District, GO, Election of 2006,
Series A (NPFGC), 5.00%, 8/01/31

 

 

1,485

 

 

1,517,328

 

Norwalk-La Mirada Unified School
District California, GO, Refunding,
CAB, Election of 2002, Series E (AGC),
6.47%, 8/01/38 (b)

 

 

7,620

 

 

1,403,223

 

Oceanside Unified School District
California, GO, Series A (AGC), 5.25%,
8/01/33

 

 

2,500

 

 

2,673,775

 

Port of Oakland, RB, Series K, AMT
(NPFGC), 5.75%, 11/01/29

 

 

3,645

 

 

3,647,515

 

Port of Oakland, Refunding RB,
Series M, AMT (NPFGC), 5.38%,
11/01/27

 

 

7,530

 

 

7,631,956

 

Riverside County Public Financing
Authority, Tax Allocation Bonds,
Redevelopment Projects (Syncora),
5.00%, 10/01/35

 

 

10,000

 

 

8,475,400

 

State of California, GO, Series 2007-2
(NPFGC), 5.50%, 4/01/30

 

 

10

 

 

10,317

 

Stockton Public Financing Authority
California, RB, Parking & Capital
Projects (NPFGC), 5.25%, 9/01/34

 

 

5,000

 

 

5,006,500

 

 

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

 

 

AGC

Assured Guaranty Corp.

AGM

Assured Guaranty Municipal Corp.

AMBAC

American Municipal Bond Assurance Corp.

AMT

Alternative Minimum Tax (subject to)

ARB

Airport Revenue Bonds

BHAC

Berkshire Hathaway Assurance Corp.

CAB

Capital Appreciation Bonds

COP

Certificates of Participation

EDA

Economic Development Authority

FGIC

Financial Guaranty Insurance Co.

GAN

Grant Anticipation Notes

GO

General Obligation Bonds

HFA

Housing Finance Agency

HRB

Housing Revenue Bonds

ISD

Independent School District

MRB

Mortgage Revenue Bonds

NPFGC

National Public Finance Guarantee Corp.

PSF-GTD

Permanent School Fund Guaranteed

RB

Revenue Bonds

S/F

Single Family

 

 

 

 

 

 

 

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

1

 

 

 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

California (concluded)

 

 

 

 

 

 

 

West Valley-Mission Community College
District, GO, Election of 2004,
Series A (AGM), 5.00%, 8/01/30

 

$

3,600

 

$

3,766,284

 

 

 

 

 

 

 

 

 

 

 

 

 

123,203,271

 

District of Columbia — 1.1%

 

 

 

 

 

 

 

Metropolitan Washington Airports
Authority, RB, Series B, AMT (AMBAC),
5.00%, 10/01/32

 

 

10,000

 

 

10,204,800

 

Florida — 15.7%

 

 

 

 

 

 

 

Broward County School Board Florida,
COP, Series A (AGM), 5.25%, 7/01/33

 

 

15,000

 

 

15,603,600

 

City of Orlando Florida, RB, Senior, 6th
Cent Contract Payments, Series A
(AGC), 5.25%, 11/01/38

 

 

14,250

 

 

14,277,218

 

City of Tallahassee Florida, RB (NPFGC),
5.00%, 10/01/32

 

 

3,300

 

 

3,414,939

 

Collier County School Board, COP (AGM),
5.00%, 2/15/23

 

 

5,000

 

 

5,338,150

 

County of Broward Florida, RB, Series A,
5.25%, 10/01/34

 

 

2,250

 

 

2,409,300

 

County of Miami-Dade Florida, GO,
Building Better Communities Program:

 

 

 

 

 

 

 

Series B, 6.38%, 7/01/28

 

 

6,000

 

 

6,961,020

 

Series B-1, 5.75%, 7/01/33

 

 

3,700

 

 

4,039,623

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

Jackson Health System (AGC),
5.75%, 6/01/39

 

 

5,200

 

 

5,595,668

 

Miami International Airport, AMT
(NPFGC), 5.38%, 10/01/25

 

 

7,500

 

 

7,683,150

 

Miami International Airport, AMT
(NPFGC), 5.38%, 10/01/27

 

 

1,000

 

 

1,018,850

 

Miami International Airport,
Series A, AMT (AGM), 5.50%,
10/01/41

 

 

19,020

 

 

19,584,894

 

Water & Sewer System (AGM),
5.00%, 10/01/39

 

 

11,700

 

 

12,290,850

 

County of Miami-Dade Florida,
Refunding RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 7/01/35

 

 

2,800

 

 

2,846,172

 

Miami International Airport, AMT
(AGC), 5.00%, 10/01/40

 

 

11,000

 

 

10,948,740

 

Miami International Airport,
Series A, AMT (AGC), 5.00%,
10/01/35

 

 

2,100

 

 

2,099,916

 

Series C (BHAC), 6.00%, 10/01/23

 

 

20,095

 

 

23,574,449

 

County of Orange Florida, Refunding RB,
Series B (NPFGC), 5.13%, 1/01/32

 

 

2,000

 

 

2,058,740

 

Miami-Dade County School Board, COP,
Refunding, Series B (AGC), 5.25%,
5/01/31

 

 

2,390

 

 

2,531,177

 

Sarasota County Public Hospital District,
RB, Sarasota Memorial Hospital
Project, Series A, 5.63%, 7/01/39

 

 

5,135

 

 

5,402,482

 

 

 

 

 

 

 

 

 

 

 

 

 

147,678,938

 

Georgia — 1.6%

 

 

 

 

 

 

 

City of Atlanta Georgia, RB, General,
Series B (AGM), 5.25%, 1/01/33

 

 

12,500

 

 

12,907,250

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

Georgia (concluded)

 

 

 

 

 

 

 

Gwinnett County Hospital Authority,
Refunding RB, Gwinnett Hospital
System, Series D (AGM), 5.50%,
7/01/41

 

$

2,275

 

$

2,365,431

 

 

 

 

 

 

 

 

 

 

 

 

 

15,272,681

 

Illinois — 16.0%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO,
Refunding, CAB, School Reform,
Series A (NPFGC), 5.39%,
12/01/22 (b)

 

 

10,515

 

 

5,880,303

 

City of Chicago Illinois, ARB, General,
Third Lien, Series B-2, AMT (NPFGC):

 

 

 

 

 

 

 

5.25%, 1/01/27

 

 

16,685

 

 

17,050,068

 

6.00%, 1/01/27

 

 

26,230

 

 

27,505,565

 

City of Chicago Illinois, GO, CAB, City
Colleges (NPFGC) (b):

 

 

 

 

 

 

 

5.55%, 1/01/29

 

 

5,000

 

 

1,865,350

 

5.68%, 1/01/33

 

 

7,950

 

 

2,262,014

 

City of Chicago Illinois, GO, Refunding,
Series B (AGM), 5.00%, 1/01/24

 

 

12,950

 

 

13,548,031

 

City of Chicago Illinois, Refunding ARB,
General, Third Lien, Series C-2,
AMT (AGM), 5.25%, 1/01/30

 

 

16,400

 

 

16,671,584

 

County of Cook Illinois, GO, Refunding,
Series A, 5.25%, 11/15/33

 

 

3,700

 

 

3,956,151

 

Illinois Finance Authority, Refunding RB,
Northwestern Memorial Hospital,
Series A, 6.00%, 8/15/39

 

 

5,250

 

 

5,848,605

 

Illinois Municipal Electric Agency, RB,
Series A (NPFGC):

 

 

 

 

 

 

 

5.00%, 2/01/35

 

 

21,200

 

 

21,829,216

 

5.25%, 2/01/35

 

 

15,000

 

 

15,540,150

 

Kane, Kendall, Etc. Counties Community
College District No. 516 Illinois, GO,
CAB, Series E (NPFGC), 5.21%,
12/15/25 (b)

 

 

8,750

 

 

4,124,662

 

Metropolitan Pier & Exposition Authority,
RB, CAB, McCormick Place Expansion
Project:

 

 

 

 

 

 

 

Series A (NPFGC) (b):

 

 

 

 

 

 

 

5.75%, 6/15/32

 

 

14,000

 

 

3,947,440

 

6.00%, 12/15/34

 

 

10,000

 

 

2,368,300

 

Series B (AGM) (b):

 

 

 

 

 

 

 

5.83%, 6/15/27

 

 

3,575

 

 

1,434,004

 

6.25%, 6/15/44

 

 

9,430

 

 

1,206,097

 

Regional Transportation Authority, RB,
Series C (NPFGC), 7.75%, 6/01/20

 

 

1,000

 

 

1,301,380

 

State of Illinois, RB, Build Illinois,
Series B, 5.25%, 6/15/34

 

 

3,500

 

 

3,662,855

 

 

 

 

 

 

 

 

 

 

 

 

 

150,001,775

 

Indiana — 2.3%

 

 

 

 

 

 

 

City of Indianapolis Indiana, Refunding
RB, Second Lien, Series B (AGC),
5.25%, 8/15/27

 

 

5,000

 

 

5,376,550

 

Indiana Municipal Power Agency, RB:

 

 

 

 

 

 

 

Series A (NPFGC), 5.00%, 1/01/37

 

 

9,200

 

 

9,405,160

 

Series B, 5.75%, 1/01/34

 

 

1,050

 

 

1,136,047

 

 

 

 

 

2

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

 

 

 

 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

Indiana (concluded)

 

 

 

 

 

 

 

Indianapolis Local Public Improvement
Bond Bank, Refunding RB,
Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

$

5,000

 

$

5,492,550

 

 

 

 

 

 

 

 

 

 

 

 

 

21,410,307

 

Iowa — 1.5%

 

 

 

 

 

 

 

Iowa Finance Authority, RB, Series A
(AGC), 5.63%, 8/15/37

 

 

12,650

 

 

13,807,601

 

Kentucky — 1.6%

 

 

 

 

 

 

 

Kentucky State Property & Buildings
Commission, Refunding RB, Project
No. 93 (AGC), 5.25%, 2/01/28

 

 

4,000

 

 

4,410,440

 

Louisville & Jefferson County
Metropolitan Sewer District Kentucky,
RB, Series A (NPFGC), 5.25%,
5/15/37

 

 

10,000

 

 

10,577,900

 

 

 

 

 

 

 

 

 

 

 

 

 

14,988,340

 

Louisiana — 1.4%

 

 

 

 

 

 

 

New Orleans Aviation Board Louisiana,
RB, New Orleans Aviation, Series A,
AMT (AGM), 5.25%, 1/01/32

 

 

13,335

 

 

13,548,893

 

Maryland — 0.5%

 

 

 

 

 

 

 

Maryland Community Development
Administration, Refunding RB,
Residential, Series A, AMT, 5.75%,
9/01/39

 

 

4,650

 

 

4,915,376

 

Massachusetts — 4.9%

 

 

 

 

 

 

 

Massachusetts HFA, RB:

 

 

 

 

 

 

 

S/F Housing, Series 128, AMT
(AGM), 4.88%, 12/01/38 (c)

 

 

12,405

 

 

12,264,079

 

Series B, 7.00%, 12/01/38

 

 

3,440

 

 

3,890,503

 

Massachusetts HFA, Refunding RB:

 

 

 

 

 

 

 

Housing Development, Series B
(NPFGC), 5.40%, 12/01/28

 

 

1,835

 

 

1,834,963

 

Rental Housing, Series A, AMT
(AGM), 5.15%, 7/01/26

 

 

18,245

 

 

18,615,191

 

Massachusetts Port Authority,
Refunding RB, BOSFUEL Project,
AMT (NPFGC), 5.00%, 7/01/38

 

 

9,925

 

 

9,620,600

 

 

 

 

 

 

 

 

 

 

 

 

 

46,225,336

 

Michigan — 7.8%

 

 

 

 

 

 

 

City of Detroit Michigan, RB Series B
(AGM):

 

 

 

 

 

 

 

Second Lien, 6.25%, 7/01/36

 

 

1,075

 

 

1,195,712

 

Second Lien, 7.00%, 7/01/36

 

 

500

 

 

585,365

 

Senior Lien, 7.50%, 7/01/33

 

 

1,800

 

 

2,193,444

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Senior Lien, Series C-1 (AGM),
7.00%, 7/01/27

 

 

1,500

 

 

1,789,275

 

Senior Lien, Series D (AGM), 5.00%,
7/01/23

 

 

9,085

 

 

9,433,955

 

Series C (NPFGC), 5.00%, 7/01/22

 

 

4,540

 

 

4,715,789

 

Series D (NPFGC), 5.00%, 7/01/33

 

 

5,000

 

 

5,047,550

 

Kalamazoo Hospital Finance Authority,
RB, Bronson Methodist Hospital
(AGM), 5.25%, 5/15/36

 

 

1,160

 

 

1,196,876

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

Michigan (concluded)

 

 

 

 

 

 

 

Michigan Higher Education Student
Loan Authority, RB, Student Loan,
Series XVII-Q, AMT (AMBAC), 5.00%,
3/01/31

 

$

4,325

 

$

4,238,154

 

Michigan State Building Authority,
Refunding RB, Facilities Program,
Series I:

 

 

 

 

 

 

 

6.25%, 10/15/38

 

 

3,125

 

 

3,487,469

 

(AGC), 5.25%, 10/15/24

 

 

1,750

 

 

1,919,715

 

(AGC), 5.25%, 10/15/25

 

 

3,250

 

 

3,538,048

 

Michigan Strategic Fund, Refunding RB,
AMT, Detroit Edison Co. (Syncora):

 

 

 

 

 

 

 

Project, Series A, 5.50%, 6/01/30

 

 

8,000

 

 

8,001,840

 

Pollution, Series C, 5.65%, 9/01/29

 

 

2,935

 

 

2,943,805

 

State of Michigan, RB, GAN (AGM):

 

 

 

 

 

 

 

5.25%, 9/15/22

 

 

10,000

 

 

10,995,700

 

5.25%, 9/15/26

 

 

6,650

 

 

7,145,225

 

Wayne County Airport Authority,
Refunding RB, AMT (AGC), 5.38%,
12/01/32

 

 

5,000

 

 

4,945,600

 

 

 

 

 

 

 

 

 

 

 

 

 

73,373,522

 

Minnesota — 0.7%

 

 

 

 

 

 

 

City of Minneapolis Minnesota,
Refunding RB, Fairview Health
Services, Series B (AGC), 6.50%,
11/15/38

 

 

5,500

 

 

6,267,250

 

Missouri — 0.0%

 

 

 

 

 

 

 

Missouri Housing Development
Commission, RB, S/F Homeowner
Loan, Series C-1, AMT (Ginnie Mae),
7.15%, 3/01/32

 

 

70

 

 

71,958

 

Nevada — 4.9%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited
Tax, Performing Arts Center, 6.00%,
4/01/34

 

 

2,250

 

 

2,516,107

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International
Airport, Series A (AGC), 5.25%,
7/01/39

 

 

5,170

 

 

5,356,172

 

Southwest Gas Corp. Project,
Series A, AMT (AMBAC), 5.25%,
7/01/34

 

 

7,500

 

 

7,422,225

 

Subordinate Lien, Series A-2
(NPFGC), 5.00%, 7/01/30

 

 

20,000

 

 

20,293,200

 

Subordinate Lien, Series A2 (BHAC),
5.00%, 7/01/30

 

 

750

 

 

770,948

 

Las Vegas Convention & Visitors
Authority, RB (AMBAC), 5.00%,
7/01/37

 

 

10,000

 

 

10,023,200

 

 

 

 

 

 

 

 

 

 

 

 

 

46,381,852

 

New Jersey — 3.2%

 

 

 

 

 

 

 

New Jersey EDA, RB, Cigarette Tax,
5.75%, 6/15/34

 

 

4,000

 

 

3,893,920

 

New Jersey EDA, Refunding RB, School
Facilities Construction, Series N-1:

 

 

 

 

 

 

 

(AMBAC), 5.50%, 9/01/24

 

 

10,000

 

 

11,593,300

 

(NPFGC), 5.50%, 9/01/28

 

 

2,165

 

 

2,468,685

 

 

 

 

 

 

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

3

 

 

 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

New Jersey (concluded)

 

 

 

 

 

 

 

New Jersey Transportation Trust Fund
Authority, RB, Transportation System:

 

 

 

 

 

 

 

CAB, Series C (AGC), 5.71%,
12/15/25 (b)

 

$

15,735

 

$

7,487,500

 

Series A (NPFGC), 5.75%, 6/15/25

 

 

4,250

 

 

4,969,397

 

 

 

 

 

 

 

 

 

 

 

 

 

30,412,802

 

New York — 2.6%

 

 

 

 

 

 

 

City of New York New York, GO:

 

 

 

 

 

 

 

Series J, 5.25%, 5/15/24

 

 

10,000

 

 

11,048,800

 

Series M (AGC), 5.00%, 4/01/30

 

 

5,000

 

 

5,301,250

 

New York City Transitional Finance
Authority, RB, Fiscal 2009, Series S-4,
5.50%, 1/15/34

 

 

7,250

 

 

8,101,077

 

 

 

 

 

 

 

 

 

 

 

 

 

24,451,127

 

North Carolina — 0.5%

 

 

 

 

 

 

 

North Carolina Medical Care
Commission, RB, Novant Health
Obligation, Series A, 4.75%,
11/01/43 (d)

 

 

4,675

 

 

4,494,311

 

Ohio — 0.3%

 

 

 

 

 

 

 

Ohio Higher Educational Facility
Commission, Refunding RB, Summa
Health System, 2010 Project (AGC),
5.25%, 11/15/40

 

 

2,775

 

 

2,844,653

 

Pennsylvania — 3.0%

 

 

 

 

 

 

 

Pennsylvania HFA, RB, S/F Mortgage,
Series 70A, AMT, 5.80%, 4/01/27

 

 

4,740

 

 

4,741,991

 

Pennsylvania Turnpike Commission, RB:

 

 

 

 

 

 

 

Series A (AMBAC), 5.50%,
12/01/31

 

 

15,600

 

 

16,842,696

 

Sub-Series C (AGC), 6.25%,
6/01/38

 

 

5,695

 

 

6,584,103

 

 

 

 

 

 

 

 

 

 

 

 

 

28,168,790

 

Puerto Rico — 2.7%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority,
Refunding RB, Government Facilities,
Series M-3 (NPFGC):

 

 

 

 

 

 

 

6.00%, 7/01/26

 

 

3,325

 

 

3,580,526

 

6.00%, 7/01/27

 

 

3,720

 

 

4,116,515

 

6.00%, 7/01/28

 

 

2,750

 

 

2,966,810

 

Puerto Rico Sales Tax Financing Corp.,
RB, First Sub-Series A, 6.38%,
8/01/39

 

 

10,195

 

 

11,652,171

 

Puerto Rico Sales Tax Financing Corp.,
Refunding RB:

 

 

 

 

 

 

 

CAB, Series A (NPFGC), 5.70%,
8/01/41 (b)

 

 

7,500

 

 

1,204,725

 

First Sub-Series C, 6.00%, 8/01/39

 

 

1,180

 

 

1,328,350

 

 

 

 

 

 

 

 

 

 

 

 

 

24,849,097

 

South Carolina — 1.0%

 

 

 

 

 

 

 

Charleston Educational Excellence
Finance Corp., RB, Charleston County
School (AGC):

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

3,895

 

 

4,198,459

 

5.25%, 12/01/29

 

 

3,215

 

 

3,436,096

 

5.25%, 12/01/30

 

 

1,160

 

 

1,232,952

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

South Carolina (concluded)

 

 

 

 

 

 

 

South Carolina State Housing Finance &
Development Authority, Refunding RB,
Series A-2, AMT (AGM), 6.35%,
7/01/19

 

$

505

 

$

512,323

 

 

 

 

 

 

 

 

 

 

 

 

 

9,379,830

 

Tennessee — 0.2%

 

 

 

 

 

 

 

Tennessee Housing Development
Agency, Refunding RB,
Homeownership Program, Series A,
AMT (AGM), 5.35%, 1/01/26

 

 

1,560

 

 

1,568,268

 

Texas — 15.3%

 

 

 

 

 

 

 

City of Houston Texas, RB, Combined,
First Lien, Series A (AGM), 5.00%,
11/15/36

 

 

10,000

 

 

10,470,900

 

City of Houston Texas, Refunding RB,
Combined, First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

5,700

 

 

6,602,994

 

5.38%, 11/15/38

 

 

3,650

 

 

4,007,372

 

Dallas ISD, GO, School Building
(PSF-GTD), 6.38%, 2/15/34

 

 

10,000

 

 

12,241,700

 

Dallas-Fort Worth International Airport
Facilities Improvement Corp.,
Refunding RB, Joint Series A,
AMT (NPFGC), 5.63%, 11/01/26

 

 

15,000

 

 

15,181,650

 

Grand Prairie ISD Texas, GO, Refunding,
CAB, 6.58%, 8/15/28 (b)

 

 

10,000

 

 

3,615,200

 

Harris County Hospital District, RB,
Senior Lien, Series A (NPFGC), 5.25%,
2/15/37

 

 

9,650

 

 

9,721,121

 

Harris County-Houston Sports Authority,
Refunding RB, Senior Lien, Series G
(NPFGC):

 

 

 

 

 

 

 

5.75%, 11/15/19

 

 

265

 

 

264,088

 

5.75%, 11/15/20

 

 

3,500

 

 

3,512,180

 

5.25%, 11/15/30

 

 

5,000

 

 

4,887,750

 

Judson ISD Texas, GO, School Building
(AGC), 5.00%, 2/01/37

 

 

10,000

 

 

10,407,500

 

Matagorda County Navigation District
No. 1 Texas, Refunding RB, Central
Power & Light Co. Project, AMT
(NPFGC), 5.20%, 5/01/30 (c)

 

 

6,150

 

 

6,245,079

 

North Texas Tollway Authority,
Refunding RB, First Tier:

 

 

 

 

 

 

 

Series A, 6.00%, 1/01/28

 

 

6,275

 

 

7,012,250

 

System, Series A (NPFGC), 5.13%,
1/01/28

 

 

21,750

 

 

22,873,387

 

System, Series B (NPFGC), 5.75%,
1/01/40

 

 

10,000

 

 

10,607,300

 

Texas Department of Housing &
Community Affairs, MRB, Series A,
AMT (NPFGC), 5.45%, 9/01/23

 

 

3,960

 

 

4,015,796

 

Texas State Turnpike Authority, RB,
First Tier, Series A (AMBAC):

 

 

 

 

 

 

 

5.50%, 8/15/39

 

 

5,500

 

 

5,579,585

 

5.00%, 8/15/42

 

 

6,900

 

 

6,711,078

 

 

 

 

 

 

 

 

 

 

 

 

 

143,956,930

 

Utah — 2.2%

 

 

 

 

 

 

 

Utah Transit Authority, Refunding RB,
CAB, Sub-Series A (b):

 

 

 

 

 

 

 

(AGC), 5.39%, 6/15/20

 

 

15,930

 

 

10,709,580

 

(NPFGC), 4.88%, 6/15/23

 

 

5,000

 

 

2,774,300

 

 

 

 

 

4

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

 

 

 

 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

Utah (concluded)

 

 

 

 

 

 

 

Utah Transit Authority, Refunding RB,
CAB, Sub-Series A (b) (concluded):

 

 

 

 

 

 

 

(NPFGC), 5.22%, 6/15/24

 

$

13,930

 

$

7,323,976

 

 

 

 

 

 

 

 

 

 

 

 

 

20,807,856

 

Vermont — 0.3%

 

 

 

 

 

 

 

Vermont HFA, HRB, Series 12B,
AMT (AGM), 6.30%, 11/01/19

 

 

290

 

 

295,922

 

Vermont HFA, Refunding RB, Multiple
Purpose, Series C, AMT (AGM), 5.50%,
11/01/38 (c)

 

 

2,585

 

 

2,671,959

 

 

 

 

 

 

 

 

 

 

 

 

 

2,967,881

 

Washington — 4.4%

 

 

 

 

 

 

 

Chelan County Public Utility District No.
1, RB, Chelan Hydro System, Series A,
AMT (AMBAC), 5.45%, 7/01/37

 

 

3,030

 

 

3,036,939

 

Chelan County Public Utility District No.
1, Refunding RB, Chelan Hydro
System, Series C, AMT (NPFGC),
5.65%, 7/01/32

 

 

6,000

 

 

6,061,380

 

Radford Court Properties Washington,
RB (NPFGC), 5.75%, 6/01/32

 

 

10,000

 

 

10,130,800

 

Seattle Housing Authority Washington,
RB, Capital Fund Program, High Rise
Rehabilitation, Series III, AMT (AGM),
5.15%, 11/01/27

 

 

6,255

 

 

6,462,791

 

Washington Health Care Facilities
Authority, RB:

 

 

 

 

 

 

 

Providence Health & Services,
Series A, 5.00%, 10/01/39

 

 

1,125

 

 

1,163,408

 

Providence Health & Services,
Series A, 5.25%, 10/01/39

 

 

2,725

 

 

2,869,752

 

Providence Health System, Series A
(NPFGC), 5.25%, 10/01/21

 

 

5,575

 

 

5,733,943

 

Washington Health Care Facilities
Authority, Refunding RB, Catholic
Health Initiatives, Series D, 6.38%,
10/01/36

 

 

5,400

 

 

6,102,810

 

 

 

 

 

 

 

 

 

 

 

 

 

41,561,823

 

Wisconsin — 0.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational
Facilities Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit
Group, 5.00%, 11/15/33

 

 

3,745

 

 

3,902,852

 

SynergyHealth Inc., 6.00%,
11/15/32

 

 

3,395

 

 

3,514,640

 

 

 

 

 

 

 

 

 

 

 

 

 

7,417,492

 

Total Municipal Bonds – 114.1%

 

 

 

 

 

1,072,161,708

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender
Option Bond Trusts (e)

 

 

 

 

 

 

 

Arizona — 1.2%

 

 

 

 

 

 

 

Arizona School Facilities Board, COP
(AGC), 5.13%, 9/01/21

 

 

10,000

 

 

10,968,600

 

California — 12.2%

 

 

 

 

 

 

 

Alameda County Joint Powers Authority,
Refunding RB, Lease (AGM), 5.00%,
12/01/34

 

 

6,990

 

 

7,182,784

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender
Option Bond Trusts (e)

 

Par
(000)

 

Value

 

California (concluded)

 

 

 

 

 

 

 

California State University, RB,
Systemwide, Series A (AGM), 5.00%,
11/01/33

 

$

7,996

 

$

8,326,244

 

California State University, Refunding
RB, Systemwide, Series A (AGM),
5.00%, 11/01/37

 

 

18,435

 

 

18,950,023

 

City of Riverside California, RB, Issue D
(AGM), 5.00%, 10/01/38

 

 

20,000

 

 

20,458,800

 

Foothill-De Anza Community College
District, GO, Election of 1999,
Series C (NPFGC), 5.00%, 8/01/36

 

 

7,500

 

 

7,710,150

 

Las Virgenes Unified School District
California, GO, Series A (AGM), 5.00%,
8/01/31

 

 

10,000

 

 

10,430,813

 

Los Angeles Community College District
California, GO, Election of 2008,
Series A, 6.00%, 8/01/33

 

 

5,248

 

 

6,024,461

 

Orange County Sanitation District, COP,
Series B (AGM), 5.00%, 2/01/37

 

 

10,780

 

 

11,309,945

 

San Diego Community College District
California, GO, Election of 2002,
5.25%, 8/01/33

 

 

1,047

 

 

1,135,485

 

San Diego County Water Authority, COP,
Refunding, Series 2008-A (AGM),
5.00%, 5/01/33

 

 

9,370

 

 

9,879,166

 

San Francisco Bay Area Rapid Transit
District, RB (AGM), 5.00%, 7/01/36

 

 

10,000

 

 

10,327,661

 

University of California, RB, Series O,
5.75%, 5/15/34

 

 

2,205

 

 

2,514,450

 

 

 

 

 

 

 

 

 

 

 

 

 

114,249,982

 

Colorado — 0.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority,
Refunding RB, Catholic Healthcare,
Series A, 5.50%, 7/01/34

 

 

2,469

 

 

2,659,608

 

Connecticut — 0.6%

 

 

 

 

 

 

 

Connecticut State Health & Educational
Facility Authority, RB, Yale University,
Series T-1, 4.70%, 7/01/29

 

 

5,010

 

 

5,378,936

 

District of Columbia — 0.8%

 

 

 

 

 

 

 

District of Columbia, RB, Series A,
5.50%, 12/01/30

 

 

2,595

 

 

2,972,053

 

District of Columbia Water & Sewer
Authority, RB, Series A, 6.00%,
10/01/35

 

 

4,281

 

 

4,872,410

 

 

 

 

 

 

 

 

 

 

 

 

 

7,844,463

 

Florida — 0.4%

 

 

 

 

 

 

 

Florida State Board of Education, GO,
Series D, 5.00%, 6/01/37

 

 

3,299

 

 

3,458,087

 

Georgia — 1.1%

 

 

 

 

 

 

 

Metropolitan Atlanta Rapid Transit
Authority, RB, Third Indenture,
Series B (AGM), 5.00%, 7/01/37

 

 

10,000

 

 

10,586,290

 

Hawaii — 1.1%

 

 

 

 

 

 

 

Honolulu City & County Board of Water
Supply, RB, Series A (NPFGC), 5.00%,
7/01/33

 

 

9,830

 

 

10,111,335

 

Illinois — 2.5%

 

 

 

 

 

 

 

City of Chicago Illinois, GO, Refunding,
Series A (AGC), 5.25%, 1/01/24

 

 

11,000

 

 

12,021,460

 

 

 

 

 

 

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

5

 

 

 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

(Percentages shown are based on Net Assets)

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender
Option Bond Trusts (e)

 

Par
(000)

 

Value

 

Illinois (concluded)

 

 

 

 

 

 

 

Illinois Finance Authority, RB, University
of Chicago, Series B, 6.25%, 7/01/38

 

$

10,000

 

$

11,703,700

 

 

 

 

 

 

 

 

 

 

 

 

 

23,725,160

 

Kentucky — 0.7%

 

 

 

 

 

 

 

Kentucky State Property & Building
Commission, Refunding RB, Project
No. 93 (AGC), 5.25%, 2/01/27

 

 

5,985

 

 

6,632,076

 

Louisiana — 1.1%

 

 

 

 

 

 

 

State of Louisiana, RB, Series A (AGM),
5.00%, 5/01/36

 

 

10,000

 

 

10,424,500

 

Nevada — 0.6%

 

 

 

 

 

 

 

Clark County Water Reclamation
District, GO, Series B:

 

 

 

 

 

 

 

5.50%, 7/01/29

 

 

510

 

 

570,157

 

5.75%, 7/01/34

 

 

4,813

 

 

5,425,343

 

 

 

 

 

 

 

 

 

 

 

 

 

5,995,500

 

New Jersey — 1.3%

 

 

 

 

 

 

 

Garden State Preservation Trust, RB,
Election of 2005, Series A (AGM),
5.75%, 11/01/28

 

 

10,000

 

 

12,361,300

 

New York — 4.6%

 

 

 

 

 

 

 

New York City Municipal Water Finance
Authority, RB, Series DD, 5.00%,
6/15/37

 

 

17,567

 

 

18,628,689

 

Port Authority of New York & New
Jersey, RB, Consolidated, 155th
Series, AMT (AGM), 5.13%, 7/15/30

 

 

19,500

 

 

20,096,505

 

Triborough Bridge & Tunnel Authority,
RB, General, Series A-2, 5.25%,
11/15/34

 

 

4,500

 

 

4,915,935

 

 

 

 

 

 

 

 

 

 

 

 

 

43,641,129

 

North Carolina — 1.1%

 

 

 

 

 

 

 

North Carolina HFA, RB, Series 31-A,
AMT, 5.25%, 7/01/38

 

 

9,996

 

 

10,146,860

 

Ohio — 0.7%

 

 

 

 

 

 

 

County of Montgomery Ohio, RB,
Catholic Health, Series C-1 (AGM),
5.00%, 10/01/41

 

 

4,990

 

 

5,099,481

 

State of Ohio, RB, Cleveland Clinic
Health, Series B, 5.50%, 1/01/34

 

 

1,520

 

 

1,646,646

 

 

 

 

 

 

 

 

 

 

 

 

 

6,746,127

 

South Carolina — 0.5%

 

 

 

 

 

 

 

South Carolina State Housing Finance &
Development Authority, Refunding RB,
Series B-1, 5.55%, 7/01/39

 

 

4,928

 

 

5,159,063

 

Texas — 3.8%

 

 

 

 

 

 

 

Friendswood ISD Texas, GO,
Schoolhouse (PSF-GTD), 5.00%,
2/15/37

 

 

12,955

 

 

13,775,625

 

Houston ISD, GO, Schoolhouse
(PSF-GTD), 5.00%, 2/15/33

 

 

10,000

 

 

10,602,400

 

Texas State University Systems,
Refunding RB, 5.25%, 3/15/26

 

 

10,000

 

 

11,074,000

 

 

 

 

 

 

 

 

 

 

 

 

 

35,452,025

 

Virginia — 0.5%

 

 

 

 

 

 

 

University of Virginia, Refunding RB,
General, 5.00%, 6/01/40

 

 

3,950

 

 

4,235,585

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender
Option Bond Trusts (e)

 

Par
(000)

 

Value

 

Washington — 5.9%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit
Authority, RB, Series A (AGM), 5.00%,
11/01/34

 

$

16,770

 

$

17,849,485

 

County of King Washington, RB (AGM),
5.00%, 1/01/37

 

 

15,785

 

 

16,540,546

 

Port of Seattle Washington, Refunding
RB, Series B, AMT (NPFGC), 5.20%,
7/01/29

 

 

20,565

 

 

20,741,893

 

 

 

 

 

 

 

 

 

 

 

 

 

55,131,924

 

Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational
Facilities Authority, Refunding RB,
Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

 

3,959

 

 

4,165,241

 

Total Municipal Bonds Transferred to
Tender Option Bond Trusts – 41.4%

 

 

 

 

 

389,073,791

 

Total Long-Term Investments
(Cost – $1,401,240,380) – 155.5%

 

 

 

 

 

1,461,235,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 

FFI Institutional Tax-Exempt Fund,
0.13% (f)(g)

 

 

17,034,166

 

 

17,034,166

 

Total Short-Term Securities
(Cost – $17,034,166) – 1.8%

 

 

 

 

 

17,034,166

 

Total Investments
(Cost – $1,418,274,546*) – 157.3%

 

 

 

 

 

1,478,269,665

 

Other Assets Less Liabilities – 1.4%

 

 

 

 

 

13,501,071

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable – (20.8)%

 

 

 

 

 

(195,850,491

)

Preferred Shares, at Redemption Value – (37.9)%

 

 

 

 

 

(356,497,181

)

 

 

 

 

 

 

Net Assets Applicable to Common Shares– 100.0%

 

 

 

 

$

939,423,064

 

 

 

 

 

 

 

 

 

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of October 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

1,222,305,374

 

 

 

 

Gross unrealized appreciation

 

$

67,547,021

 

Gross unrealized depreciation

 

 

(7,246,005

)

 

 

 

Net unrealized appreciation

 

$

60,301,016

 

 

 

 

 

 

(a)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(b)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(c)

Variable rate security. Rate shown is as of report date.

 

 

(d)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 

Counterparty

 

Value

 

Unrealized
Appreciation

 

JP Morgan Securities

 

$

4,494,311

 

$

7,293

 

 

 

 

 

6

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

 

 

 

 

 

Schedule of Investments (concluded)

BlackRock MuniYield Quality Fund III, Inc. (MYI)

 

 

(e)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction.

 

 

(f)

Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Affiliate

 

Shares
Held at
July 31,
2010

 

Net
Activity

 

Shares
Held at
October 31,
2010

 

Income

 

FFI Institutional

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt

 

 

 

 

 

 

 

 

 

 

 

 

 

Fund

 

 

11,426,470

 

 

5,607,696

 

 

17,034,166

 

$

6,411

 

 

 

 

(g)

Represents the current yield as of report date.

 

 

 

•

Fair Value Measurements - Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

•

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

•

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

•

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its annual report.

The following table summarizes the inputs used as of October 31, 2010 in determining the fair valuation of the Fund’s investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

—

 

$

1,461,235,499

 

 

—

 

$

1,461,235,499

 

Short-Term
Securities

 

$

17,034,166

 

 

—

 

 

—

 

 

17,034,166

 

Total

 

$

17,034,166

 

$

1,461,235,499

 

 

—

 

$

1,478,269,665

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.

 

 

 

 

 

BLACKROCK MUNIYIELD QUALITY FUND III, INC.

OCTOBER 31, 2010

7

Item 2 –

Controls and Procedures

 

 

2(a) –

The registrant's principal executive and principal financial officers or persons performing similar functions have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the ″1940 Act″)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 

 

2(b) –

There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

 

 

Item 3 –

Exhibits

 

 

 

Certifications – Attached hereto

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

BlackRock MuniYield Quality Fund III, Inc.
   
  By: /s/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer of
    BlackRock MuniYield Quality Fund III, Inc.
   
  Date: December 22, 2010
   
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
   
  By: /s/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield Quality Fund III, Inc.
   
  Date: December 22, 2010
   
  By: /s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield Quality Fund III, Inc.
     
  Date: December 22, 2010