Editor's letter: Chill wind after joy of spring

The importance of a functioning new-issue market cannot be understated. It is primary issuance that creates transparency and pricing, helping secondary market trading. Regardless of whether the new issues are cheap, expensive or priced fairly, the key is that – at that moment, for that issuer – there is a clear price in the market for a very large transaction. From that follows the relative pricing of different issuers and structures.

The return of some liquidity is also good news for credit valuations. Much of the credit market is not actually impaired but trading at distressed levels mostly because of widespread nervousness and the absence of once price-making leveraged investors, who now have no access to funding.

The debt capital markets thawed when fears that systemic problems would overcome the global financial system faded. But they are not in the clear. The air of relief was tempered as credit spreads...