A type of sukuk whose underlying contract is musharakah, and as such have a relatively stable rate as compared to dividend payouts. By nature, these sukuk are senior to the issuer’s equity, and come with a redemption feature (i.e., sukuk are redeemable). The sukuk structure depends on musharakah returns, and the floating rate of return on these sukuk would not be indexed with market benchmarks such as LIBOR but would rather depend on the issuer’s actual performance.

Variable rate redeemable sukuk are also known as musharakah term finance certificates (MTFCs).