diff --git a/libxl.pvscsi.patch b/libxl.pvscsi.patch
index fe6fccf..785fb4d 100644
--- a/libxl.pvscsi.patch
+++ b/libxl.pvscsi.patch
@@ -105,7 +105,7 @@ Index: xen-4.7.0-testing/docs/man/xl.pod.1
 ===================================================================
 --- xen-4.7.0-testing.orig/docs/man/xl.pod.1
 +++ xen-4.7.0-testing/docs/man/xl.pod.1
-@@ -1416,6 +1416,24 @@ List virtual trusted platform modules fo
+@@ -1417,6 +1417,24 @@ List virtual trusted platform modules fo
  
  =back
  
diff --git a/x86-PoD-only-reclaim-if-needed.patch b/x86-PoD-only-reclaim-if-needed.patch
new file mode 100644
index 0000000..338cc41
--- /dev/null
+++ b/x86-PoD-only-reclaim-if-needed.patch
@@ -0,0 +1,32 @@
+References: bsc#961600
+
+Reclaiming pages is pointless when the cache can already satisfy all
+outstanding PoD entries, and doing reclaims in that case can be very
+harmful to performance when that memory gets used by the guest, but
+only to store zeroes there.
+
+Signed-off-by: Jan Beulich <jbeulich@xxxxxxxx>
+
+Index: xen-4.7.0-testing/xen/arch/x86/mm/p2m-pod.c
+===================================================================
+--- xen-4.7.0-testing.orig/xen/arch/x86/mm/p2m-pod.c
++++ xen-4.7.0-testing/xen/arch/x86/mm/p2m-pod.c
+@@ -1031,7 +1031,6 @@ static void pod_eager_record(struct p2m_
+ {
+     struct pod_mrp_list *mrp = &p2m->pod.mrp;
+ 
+-    ASSERT(mrp->list[mrp->idx] == INVALID_GFN);
+     ASSERT(gfn != INVALID_GFN);
+ 
+     mrp->list[mrp->idx++] =
+@@ -1079,7 +1078,9 @@ p2m_pod_demand_populate(struct p2m_domai
+         return 0;
+     }
+ 
+-    pod_eager_reclaim(p2m);
++    /* Only reclaim if we're in actual need of more cache. */
++    if ( p2m->pod.entry_count > p2m->pod.count )
++        pod_eager_reclaim(p2m);
+ 
+     /* Only sweep if we're actually out of memory.  Doing anything else
+      * causes unnecessary time and fragmentation of superpages in the p2m. */
diff --git a/xen-4.7.0-testing-src.tar.bz2 b/xen-4.7.0-testing-src.tar.bz2
index 50b75bc..d83aea5 100644
--- a/xen-4.7.0-testing-src.tar.bz2
+++ b/xen-4.7.0-testing-src.tar.bz2
@@ -1,3 +1,3 @@
 version https://git-lfs.github.com/spec/v1
-oid sha256:524bc5df998a153fe4fc84a878057cf14e93c97ca0f45a38f0c30647a359f4da
-size 4457990
+oid sha256:2b89d13516c53564c901ceb6599543812d7ad18e95fac06c062987984eb43a22
+size 4463595
diff --git a/xen.changes b/xen.changes
index 7b6e229..68642d2 100644
--- a/xen.changes
+++ b/xen.changes
@@ -1,3 +1,16 @@
+-------------------------------------------------------------------
+Tue May 10 14:39:00 MDT 2016 - carnold@suse.com
+
+- fate#319989 - Update to Xen 4.7 RC2
+  xen-4.7.0-testing-src.tar.bz2
+
+-------------------------------------------------------------------
+Tue May 10 11:06:56 MDT 2016 - carnold@suse.com
+
+- bsc#961600 - L3: poor performance when Xen HVM domU configured
+  with max memory > current memory
+  x86-PoD-only-reclaim-if-needed.patch
+
 -------------------------------------------------------------------
 Fri May  6 11:47:24 UTC 2016 - ohering@suse.de
 
diff --git a/xen.spec b/xen.spec
index fe87453..75f13ff 100644
--- a/xen.spec
+++ b/xen.spec
@@ -281,6 +281,7 @@ Patch463:       libxl.set-migration-constraints-from-cmdline.patch
 # Hypervisor and PV driver Patches
 Patch501:       x86-ioapic-ack-default.patch
 Patch502:       x86-cpufreq-report.patch
+Patch503:       x86-PoD-only-reclaim-if-needed.patch
 Patch520:       xen_pvonhvm.xen_emul_unplug.patch
 Patch521:       supported_module.patch
 Patch601:       xen.build-compare.doc_html.patch
@@ -599,6 +600,7 @@ Authors:
 # Hypervisor and PV driver Patches
 %patch501 -p1
 %patch502 -p1
+%patch503 -p1
 %patch520 -p1
 %patch521 -p1
 %patch601 -p1