diff --git a/openssh-7.2p2-chroot-capabilities.patch b/openssh-7.2p2-chroot-capabilities.patch
new file mode 100644
index 0000000..69a5342
--- /dev/null
+++ b/openssh-7.2p2-chroot-capabilities.patch
@@ -0,0 +1,102 @@
+diff --git a/configure.ac b/configure.ac
+index aeef42a..d01e67e 100644
+--- a/configure.ac
++++ b/configure.ac
+@@ -4998,6 +4998,37 @@ if test -n "$conf_lastlog_location"; then
+ 		[Define if you want to specify the path to your lastlog file])
+ fi
+ 
++AC_ARG_WITH(libcap-ng,
++	[  --with-libcap-ng=[auto/yes/no]  Add Libcap-ng support [default=auto]],,
++	with_libcap_ng=auto)
++
++dnl libcap-ng detection
++if test x$with_libcap_ng = xno ; then
++	have_libcap_ng=no;
++else
++	# Start by checking for header file
++	AC_CHECK_HEADER(cap-ng.h, capng_headers=yes, capng_headers=no)
++
++	# See if we have libcap-ng library
++	AC_CHECK_LIB(cap-ng, capng_clear, CAPNG_LDADD=-lcap-ng,)
++
++	# Check results are usable
++	if test x$with_libcap_ng = xyes -a x$CAPNG_LDADD = x ; then
++	AC_MSG_ERROR(libcap-ng support was requested and the library was not found)
++	fi
++	if test x$CAPNG_LDADD != x -a $capng_headers = no ; then
++	AC_MSG_ERROR(libcap-ng libraries found but headers are missing)
++	fi
++fi
++AC_MSG_CHECKING(whether to use libcap-ng)
++if test x$CAPNG_LDADD != x ; then
++	AC_DEFINE(HAVE_LIBCAP_NG,1,[libcap-ng support])
++	SSHDLIBS="$SSHDLIBS -lcap-ng"
++	AC_MSG_RESULT(yes)
++else
++	AC_MSG_RESULT(no)
++fi
++
+ dnl utmp detection
+ AC_MSG_CHECKING([if your system defines UTMP_FILE])
+ AC_COMPILE_IFELSE([AC_LANG_PROGRAM([[
+diff --git a/session.c b/session.c
+index 6cfcba4..80d2806 100644
+--- a/session.c
++++ b/session.c
+@@ -96,6 +96,10 @@
+ #include "monitor_wrap.h"
+ #include "sftp.h"
+ 
++#ifdef HAVE_LIBCAP_NG
++#include <cap-ng.h>
++#endif
++
+ #if defined(KRB5) && defined(USE_AFS)
+ #include <kafs.h>
+ #endif
+@@ -1586,6 +1590,7 @@ void
+ do_setusercontext(struct passwd *pw)
+ {
+ 	char *chroot_path, *tmp;
++	int dropped_suid = -1;
+ 
+ 	platform_setusercontext(pw);
+ 
+@@ -1619,10 +1624,24 @@ do_setusercontext(struct passwd *pw)
+ 			    pw->pw_uid);
+ 			chroot_path = percent_expand(tmp, "h", pw->pw_dir,
+ 			    "u", pw->pw_name, (char *)NULL);
++#ifdef HAVE_LIBCAP_NG
++			/* drop suid soon, retain SYS_CHROOT capability */
++			capng_clear(CAPNG_SELECT_BOTH);
++			capng_update(CAPNG_ADD, CAPNG_EFFECTIVE|CAPNG_PERMITTED, CAP_SYS_CHROOT);
++			if ((dropped_suid = capng_change_id(pw->pw_uid, pw->pw_gid, CAPNG_DROP_SUPP_GRP | CAPNG_CLEAR_BOUNDING)) != 0)
++				logit("capng_change_id() = %d (failure): Try to drop UID later", dropped_suid);
++#endif
+ #ifdef WITH_SELINUX
+ 			sshd_selinux_copy_context();
+ #endif
+ 			safely_chroot(chroot_path, pw->pw_uid);
++#ifdef HAVE_LIBCAP_NG
++			/* Drop chroot capability. Already used */
++			if (dropped_suid == 0) {
++				capng_clear(CAPNG_SELECT_BOTH);
++				capng_apply(CAPNG_SELECT_BOTH);
++			}
++#endif
+ 			free(tmp);
+ 			free(chroot_path);
+ 			/* Make sure we don't attempt to chroot again */
+@@ -1654,8 +1673,9 @@ do_setusercontext(struct passwd *pw)
+ 		if (!in_chroot && set_id(pw->pw_name) != 0)
+ 			fatal("set_id(%s) Failed", pw->pw_name);
+ # endif /* USE_LIBIAF */
+-		/* Permanently switch to the desired uid. */
+-		permanently_set_uid(pw);
++		/* Permanently switch to the desired uid if not yet done. */
++		if (dropped_suid != 0)
++			permanently_set_uid(pw);
+ #endif
+ 
+ #ifdef WITH_SELINUX
diff --git a/openssh.spec b/openssh.spec
index 7760999..1ec8dc5 100644
--- a/openssh.spec
+++ b/openssh.spec
@@ -245,6 +245,8 @@ Patch940: openssh-7.2p2-expose-pam.patch
 # https://github.com/openssh/openssh-portable/commit/9286875a
 # https://github.com/openssh/openssh-portable/commit/283b97ff
 Patch941: openssh-7.2p2-user-enumeration.patch
+# Rework SELinux context handling with chroot (#1357860)
+Patch942: openssh-7.2p2-chroot-capabilities.patch
 
 
 License: BSD
@@ -274,6 +276,7 @@ BuildRequires: tcp_wrappers-devel
 BuildRequires: fipscheck-devel >= 1.3.0
 BuildRequires: openssl-devel >= 0.9.8j
 BuildRequires: perl-podlators
+BuildRequires: libcap-ng-devel
 
 %if %{kerberos5}
 BuildRequires: krb5-devel
@@ -485,6 +488,7 @@ popd
 %patch939 -p1 -b .s390-dev
 %patch940 -p1 -b .expose-pam
 %patch941 -p1 -b .user-enumeration
+%patch942 -p1 -b .chroot-cap
 
 %patch200 -p1 -b .audit
 %patch201 -p1 -b .audit-race