Fitch Ratings has withdrawn the 'F1+' short-term ratings assigned to Variable Rate Demand Preferred Shares (VRDP Shares) issued by three municipal closed-end funds managed by BlackRock Advisors, LLC (the Funds) as listed below.
The VRDP Shares' long-term ratings of 'AA' are not affected, and no rating actions are being taken with respect to the long-term ratings.
BlackRock MuniYield Pennsylvania Quality Fund (MPA)
$82,600,000 of VRDP Shares, Series W-7, final mandatory redemption on June 1, 2041, short-term rating of 'F1+' withdrawn.
BlackRock MuniYield Quality Fund III, Inc. (MYI)
$356,400,000 of VRDP Shares, Series W-7, final mandatory redemption on June 1, 2041, short-term rating of 'F1+' withdrawn.
BlackRock MuniYield New York Quality Fund, Inc. (MYN)
$247,700,000 of VRDP Shares, Series W-7, final mandatory redemption on May 1, 2041, short-term rating of 'F1+' withdrawn.
The ratings are withdrawn as they are no longer considered relevant to Fitch's coverage.
KEY RATING DRIVERS
Fitch is withdrawing the short-term ratings on the VRDP Shares following the commencement of a Special Rate Period (SRP) issued by the three Funds, as the ratings are no longer relevant to Fitch's coverage. During the SRP, The Toronto-Dominion Bank (TD Bank), acting through its New York branch, will be the liquidity provider to the VRDP Shares. However, during the SRP, the VRDP Shares will not be subject to optional or mandatory tender events and will not be remarketed by a remarketing agent pursuant to such events, so the short-term rating is therefore withdrawn.
The SRP will be in effect until June 21, 2023. The withdrawn short-term ratings of the VRDP Shares were directly linked to the short-term rating of TD Bank as the liquidity provider to the VRDP Shares.
At the conclusion of the SRPs on June 21, 2023, holder(s) of VRDP Shares and the Funds may mutually elect to extend the SRP. However, if the SRP is not extended, the VRDP Shares will revert to remarketable securities available for purchase by qualified third-party investors. At that point, the VRDP Shares are expected to benefit from an unconditional and irrevocable purchase obligation by a liquidity provider upon optional or mandatory tender events, similar to other Fitch-rated VRDP Shares issued by Blackrock closed-end funds.
If the SRP is not extended, Fitch would assign a short-term rating to the VRDP Shares based on the then-current short-term rating of the applicable liquidity provider.
The Funds are closed-end funds regulated by the Investment Company Act of 1940. Each Fund invests a significant portion of its total net assets in municipal bond securities rated at least investment-grade. Each Fund also invests a significant portion of its total net assets in securities, the interest of which is exempt from both federal and applicable state income taxes.
BlackRock Advisors, LLC, a subsidiary of BlackRock, Inc., is the advisor to the Funds, responsible for the overall investment strategies and their implementation. BlackRock, Inc. and its affiliates had approximately $9.6 trillion of assets under management as of March 31, 2022.
Short-term rating sensitivities are no longer relevant given today's short-term rating withdrawals.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579
SOURCES OF INFORMATION
The sources of information used to assess this rating were the public domain and BlackRock Advisors, LLC.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The withdrawn short-term ratings of the VRDP Shares were directly linked to the short-term rating of TD Bank as the liquidity provider to the VRDP Shares.
Entity / Debt
BlackRock MuniYield Quality Fund III, Inc.
BlackRock MuniYield New York Quality Fund, Inc.
BlackRock MuniYield Pennsylvania Quality Fund
VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com