diff --git a/CHANGELOG.md b/CHANGELOG.md
index 824e3a17..bd337d3a 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,17 @@
 
 All notable changes to this project are documented in this file.
 
+## 0.12.2
+
+**Release date:** 2021-05-10
+
+This prerelease comes with a bug fix to `Bucket` source ignore
+handling.
+
+Fixes:
+* Split bucket item key by `/` to satisfy matcher
+  [#356](https://github.com/fluxcd/source-controller/pull/356)
+
 ## 0.12.1
 
 **Release date:** 2021-04-23
diff --git a/config/manager/kustomization.yaml b/config/manager/kustomization.yaml
index 848a13eb..08f7dbdf 100644
--- a/config/manager/kustomization.yaml
+++ b/config/manager/kustomization.yaml
@@ -6,4 +6,4 @@ resources:
 images:
 - name: fluxcd/source-controller
   newName: fluxcd/source-controller
-  newTag: v0.12.1
+  newTag: v0.12.2
diff --git a/go.mod b/go.mod
index e25ef6bb..1f98d01c 100644
--- a/go.mod
+++ b/go.mod
@@ -17,7 +17,7 @@ require (
 	github.com/fluxcd/pkg/ssh v0.0.5
 	github.com/fluxcd/pkg/untar v0.0.5
 	github.com/fluxcd/pkg/version v0.0.1
-	github.com/fluxcd/source-controller/api v0.12.1
+	github.com/fluxcd/source-controller/api v0.12.2
 	github.com/go-git/go-billy/v5 v5.1.0
 	github.com/go-git/go-git/v5 v5.3.0
 	github.com/go-logr/logr v0.4.0