On Friday, Fitch Ratings improved the senior secured debt ratings for Graphic Packaging Holding Co.

The ratings agency said that it increased its ratings on the customer products packaging manufacturer's senior secured rotating loan to "BB/RR1" from "BB-/RR2" and enhanced its senior secured term loans to "BB/RR1" from "BB-/RR2".

The ratings continue to be in non-investment grade, or "junk" area.

Fitch said that Graphic Packaging gained last year from lesser costs materials and energy, leading to improved gross and operating profits margins, although sales quantity plummeted.

Its cash inflow was more than Fitch anticipated, and it got almost $140 million from the Government in alternate fuel tax credits that aided reimburse more than $380 million in debt.

The effect was that its debt to income before taxes, depreciation, and amortization ratio enhanced. The company anticipates to lower debt by an additional $200 million this year, which would boost that ratio more.

In the first quarter, outcomes revealed better sales numbers that Fitch deems will carry on for 2010. The firm has also augmented some prices.

Fitch said, "Because the vast majority of GPK's carton sales are sold under contracts with cost recapture provisions, the company will likely struggle through the year in a seesaw battle with prices lagging changes in its cost structure".