diff --git a/CHANGELOG.md b/CHANGELOG.md
index f9cb1d8e16ff..ebd2da4a0031 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -36,9 +36,13 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 ## Unreleased
 
+## [v0.42.9](https://github.com/cosmos/cosmos-sdk/releases/tag/v0.42.9) - 2021-08-04
+
 ### Bug Fixes
 
 * [\#9835](https://github.com/cosmos/cosmos-sdk/pull/9835) Moved capability initialization logic to BeginBlocker to fix nondeterminsim issue mentioned in [\#9800](https://github.com/cosmos/cosmos-sdk/issues/9800). Applications must now include the capability module in their BeginBlocker order before any module that uses capabilities gets run.
+* [\#9201](https://github.com/cosmos/cosmos-sdk/pull/9201) Fixed `<app> init --recover` flag.
+
 
 ### API Breaking Changes
 
diff --git a/RELEASE_NOTES.md b/RELEASE_NOTES.md
index f7ef04b1e531..35ff8ae10d80 100644
--- a/RELEASE_NOTES.md
+++ b/RELEASE_NOTES.md
@@ -1,9 +1,10 @@
-# Cosmos SDK v0.42.8 "Stargate" Release Notes
+# Cosmos SDK v0.42.9 "Stargate" Release Notes
 
-This release includes various minor bugfixes and improvments, including:
+This release includes an important `x/capabiliy` module bug fix for 0.42.7 and 0.42.8 which prohibits IBC to create new channels (issuse [\#9800](https://github.com/cosmos/cosmos-sdk/issues/9800)).
+The fix changes the `x/capability/keeper/Keeper.InitializeAndSeal` method behavior and requires to update an app module manager by adding x/capability module to Begin Blockers.
 
-- emit events for tx signature and sequence, so clients can now query txs by signature (`tx.signature='<base64_sig>'`) or by address and sequence combo (`tx.acc_seq='<addr>/<seq>'`),
-- support other signing algorithms than `secp256k1` with `--ledger` in with the CLI `keys add` command,
-- add missing documentation for CLI flag `--output json/text` to all `tx` cli commands.
+We also fixed `<app> init --recovery` mode where the mnemonic was not handled correctly.
 
-See the [Cosmos SDK v0.42.8 milestone](https://github.com/cosmos/cosmos-sdk/milestone/50?closed=1) on our issue tracker for the exhaustive list of all changes.
+We also changed `<app> tx distribution withdraw-all-rewards` CLI by forcing the broadcast mode if a chunk size is greater than 0. This will ensure that the transactions do not fail even if the user uses invalid broadcast modes for this command (sync and async). This was requested by the community and we consider it as fixing the `withdraw-all-rewards` behavior.
+
+See the [Cosmos SDK v0.42.9 milestone](https://github.com/cosmos/cosmos-sdk/milestone/53?closed=1) on our issue tracker for the exhaustive list of all changes.